According to the latest estimates by the Indian Sugar Mills’ Association (ISMA), 518 sugar mills have produced 167.08 lakh tonnes (lt) of the sweetener in the 2014-15 sugar season as of February 15. It represents a rise of 15 per cent, with output during the corresponding period last season having been 145.28 lt produced by 479 mills.
ISMA estimates total sugar output in India, the second largest sugar producing nation, for 2014-15 to be 260 lt.
In Maharashtra, the country’s biggest sugar producing State, 178 mills produced 65 lt of sugar till February 15, compared to 49.8 lt produced by 146 mills at the same time the year before. The average recovery rate in the State stood at 10.99 per cent as compared to 11.02 per cent last season.
Output in Uttar Pradesh, the second-largest sugar producer, stood at 42.25 lt from 118 mills as compared to 35.7 lt produced by 119 mills in 2013-14. In Karnataka, third in terms of production, 62 mills recorded output of 28.2 lt till February 15 as compared to 27.27 lt from 56 mills the previous season.
States such as Tamil Nadu, Andhra Pradesh, Telangana and Gujarat, registered declines in output over the first fortnight this month.
Around 3.25 lt was produced by 40 mills in Tamil Nadu as against the same number of mills producing 5.2 lt over the same period last season. Output was lower in Andhra Pradesh and Telangana at 6.44 lt, which registered 6.58 lt at this time last season. Two mills each in both States have closed crushing operations for the 2014-15 season.
Gujarat had 19 mills producing 7.25 lt while last season it recorded 7.5 lt produced by 17 mills at this juncture last season.
Mills in Bihar and Punjab have produced 4.15 lt and 3.15 lt respectively.
Depressed prices
The association stated that the Centre delaying the announcement of the export incentive on raw sugar had depressed prices further in western and southern India. Mills in these regions “have started offering white sugar even below Rs 2,400/quintal ex-factory” while prices in the north were ruling around Rs. 2,650/quintal.
“Since the start of the current crushing season, ex-mill prices in the domestic market have declined by Rs 5-6/kg and are at their lowest in the last three-four years … mills are finding it difficult to generate funds for making payments to cane growers even at FRP as also to meet their day-to-day financial requirements like payment of wages, input costs, repayment of loans to banks, etc.,” said the ISMA statement.
Cane arrears as on February 15 stood at Rs 12,300 and would likely cross Rs 13,000 crore by the end of the month and arrears generally peak by end-March, the association warned.
“The Government should immediately take a decision on continuation of incentives on production and exports of raw sugar … mills have to produce raw sugar for which hardly one-to-one-and-a-half months are left in the current season. Mills will only produce raw sugar after export contracts are finalised,” the statement added.
Only 64,000 tonnes of raw sugar had been produced till January 31 whereas mills had produced 7.93 lt of raws by the corresponding period the season before.