Commodity News

Sugar Production Falls 23 Percent till 15th February: ISMA

Chander Mohan
Chander Mohan

As on 15th February 2020, 169.85 lac tons of sugar have been produced by the mills in India, as compared to 219.66 lac tons on the corresponding date last year. Out of 449 sugar mills which had started crushing for 2019-20 SS, 23 sugar mills have stopped crushing operation due to non-availability of sugarcane.  Last year, 521 sugar mills had operated, out of which 19 had stopped crushing on the same corresponding date last year.

 In Maharashtra, sugar production till 15th February 2020 was 43.38 lac tons, compared with 82.98 lac tons produced last year same period.  Out of 143 mills which operated this season, eight sugar mills have stopped their crushing.  Last year 193 mills had operated i.e. 50 sugar mills remained closed in Maharashtra due to less cane this year.

In U.P. 119 sugar mills which are in operation have produced 66.34 lac tons of sugar till 15th February 2020, compared with 63.93 lac tons produced by 117 mills on the corresponding date of last year.

In case of Karnataka, till 15th February 2020, 63 sugar mills had commenced operations and they have produced 30.80 lac tons, as compared to 38.74 lac tons produced by 66 sugar mills last year same period.  Out of 63 sugar mills which went for crushing this season, 13 sugar mills have stopped crushing as on 15th February 2020.

In case of Tamil Nadu, 21 sugar mills commenced their crushing operations so far for 2019-20 SS and they produced 2.60 lac tons of sugar, as compared to 3.85 lac tons produced by 32 sugar mills in 2018-19 SS on the corresponding date.

Gujarat has produced 5.95 lac tons of sugar till 15th February 2020 with 15 sugar mills in operation.  Last year, 16 sugar mills were in operation and they had produced 7.78 lac tons of sugar till 15th February 2020.

 In Andhra Pradesh and Telangana, 18 sugar mills have produced 3.06 lac tons as on 15th February 2020, as compared to 4.50 lac tons produced by 25 mills on the corresponding date last season.  Two out of 18 sugar mills which operated this season has ended their crushing on 15th February 2020.

 In Bihar, Uttarakhand, Punjab, Haryana and Madhya Pradesh & Chhattisgarh, sugar production till 15th February 2020has been in the order of 5.08 lac tons, 2.41 lac tons, 3.72 lac tons, 3.51 lac tons and 2.76 lac tons, respectively.

 Ex-mill sugar prices in the Southern and Western parts of the country are ruling in the range of Rs. 3100-3200 per quintal and in Northern parts the same are in the range of Rs. 3200-3300 per quintal. 

As per market reports, about 16 lac tons of sugar have been exported from India and about 32 lac tons of contracts have been signed for exports.  As per reports available, few sugar mills are not planning to export sugar against their allocated export quotas.  A few of them have surrendered a part of their MAEQ to the Government of India.  As per decision of the Government, 20% of export quotas of mills which have not contracted for 25% of their MAEQ by end of January 2020, will be withdrawn and reallocated amongst the others who have exported most of the MAEQ and are willing to export beyond their original MAEQ.  It is understood that this process of reallocation is under active consideration and would be announced shortly.

As per experts in the international trade, there is an estimated deficit of 8 to 9 million tons in 2019-20 SS in the global market and that the Thailand’s exports are likely to be down by 3-4 mn tons due to lower production therein.  Global sugar prices for raw and white sugar are currently prevailing at 20-25% more than the price which prevailed three months ago when India started its exports against the 6 mn tons of MAEQ.  Accordingly, Indian sugar exports may get accelerated in the coming months, and could achieve more than 5 mn tons of MAEQ in the whole season.

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