MUMBAI (Commoditiescontrol) – India sugar production so far (up to March 15) of the current season, started from October 2017 rose 46% at 258.06 lakh tonnes compared with 175.50 lakh tonnes same period a year ago, said Indian Sugar Mills Association (ISMA) in a release.
It is important to note that out of 523 sugar mills operated, 106 sugar mills in the country have already closed their operations, out of which 31 are in Maharashtra, 48 in Karnataka, 5 mills in Uttar Pradesh, 9 mills in Tamil Nadu, 7 mills in Andhra Pradesh & Telangana and 6 mills in other States, according to release.
Maharashtra sugar mills have produced 93.83 lac tons of sugar, sugar mills of U.P. produced 84.39 lac tons till 15th March 2018. Karnataka sugar mills have produced 35.10 lac tons of sugar.
The mills in the other States have produced 44.74 lakh tonnes (Gujarat 9.10; Bihar 5.80; Haryana 5.25; Punjab 5.80; A.P & Telangana 6.40; Tamil Nadu 4.20; Uttarakhand 3.25; Madhya Pradesh & Chhattisgarh 4.50) till 15th March 2018.
Ex-mill sugar prices have once again started plummeting and are now hovering between Rs. 2900/100kg in Western & Southern States and Rs. 3000/100kg in Northern States. Sugar mills are incurring losses as compared to their cost of production of around Rs. 3500-3600/100kg. They are unable to pay cane price to the farmers on time.
As per the figures of Cane Commissioners of major sugar producing States and Government of India, cane price arrears of farmers across the country were about Rs. 14,000 crore as on 31st January, 2018.
With the crushing season in full swing in most of the States, considering the trend of cane price paid by the sugar mills in February and March in the last five sugar seasons, and the fact that only 30% of sugar produced in these months get sold and the rest get stocked as unsold inventories, it is estimated that cane price arrears at the end of March 2018 may touch record levels and become uncomfortable.
Since sugar production during the current 2017-18 will be excess by 45 lakh tonnes over and above the domestic requirement and anticipation of another surplus sugar year in 2018-19 which is to be started from 1st October, 2018, India needs to export at least 20 lakh tonnes of sugar in the current season and another 40-50 lakh tonnes of sugar in the next season.
In order to enable mills to dispose off some of their surplus stocks during the current season itself, Government of India needs to remove export duty of 20% on sugar with immediate effect, as also announce 20 lakh tonnes of sugar to be exported under MIEQ as was done in 2015-16.
Government of India should also announce export of 40-50 lakh tonnes of raw sugar well before the start of next season, so that millers could plan, produce and export raw sugar from the beginning of the next season i.e. 1st October 2018, as it will reduce the burden on sugar mills carrying higher inventories for a longer period.
(By Commoditiescontrol Bureau; +91-22-40015533)
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