Sugar Production in India Falls Nearly 19 percent till 15th May

Sugar mills across the country have produced 264.65 lac tons of sugar between 1^st October 2019 and 15^th May 2020.  This is 61.54 lac tons less than 326.19 lac tons produced at the same time last year.  However, as compared to 38 sugar mills which were crushing sugarcane on 15^th May 2019, 63 sugar mills are crushing sugarcane on 15^th May’ 2020 this year. 

U.P. sugar mills have produced 122.28 lac tons of sugar as on 15^th May’ 2020, which is 5.48 lac tons higher than the production of 116.80 lac tons produced by them last year on the corresponding date. This production is the highest ever sugar production in the State, surpassing 120.45 Lac tons produced in 2017-18 SS. Out of 119 mills operated this year, 73 mills have ended their crushing and 46 mills continue their operations, compared to 28 mills which were operating on 15^th May’ 2019 last year. 

Factories in East UP have already closed their crushing operations for the current season. About 40 % of the factories in Central U.P. are operating, while about 70% of the factories are operating in West UP. Most of the operating factories are expected to close by the end of this month, however, a few may continue till 1^st week of June’ 2020. 

rushing season has got prolonged in the State as most of the Gur / Khandsari units have closed their operations prematurely due to lockdown, due to which significant portion of cane that would have gone to them, have been diverted to the sugar mills for crushing in the current season. Almost 80% of the Gur/ Khandsari units in the State are primarily located in Western and Central U.P., thereby increasing supply of sugarcane for crushing in the sugar mills in these regions of the State. 

In Maharashtra, sugar production till 15^th May 2020 was 60.87 lac tons, compared with 107.15 lac tons produced in 2018-19 SS., almost 46.3 lakh tons less than last year. In the current 2019-20 SS, 145 mills have already closed their crushing operations in the State and only 1 sugar mill is operating, while last year on the corresponding date, crushing season had already concluded by 30^th April’ 2019.

 All the operating sugar mills in Karnataka had closed their crushing operations by 30^th April’ 2020 and have produced 33.82 lac tons of sugar. However, few mills might operate in the special season commencing July’ 2020. Last year during the special season, Karnataka mills had produced 1.05 lac tons of sugar. As compared to the above, 43.25 lac tons was produced in 2018-19 SS on the corresponding date. 

 As on date, in Tamil Nadu, 9 mills are in operation, out of 24 sugar mills which operated this season. Till 15^th May’ 2020, sugar production in the State was 5.65 lac tons, compared with 7.16 lac tons produced on the corresponding date last year.  Of the 32 sugar mills, 30 mills had ended their operations and only 2 mills were in operation as on 15^th May 2019, last year. Last year, during the special season, 2.13 lakh tons were produced by mills in Tamil Nadu.  

All the factories in Gujarat have closed their crushing operations for the current season and have produced 9.28 lac tons of sugar as compared to 11.21 lac tons of sugar produced in 2018-19 SS. 

The remaining States of Andhra Pradesh, Telangana, Bihar, Uttarakhand, Punjab, Haryana and Madhya Pradesh, Chhattisgarh, Rajasthan and Odisha have collectively produced 32.75 lac tons till 15^th May, 2020. As on date, 5 mills are operating in Haryana, while 1 mill is operating in Uttarakhand, which are expected to close their crushing operations shortly. 

As per market sources, contracts for export of 42 lac tons have been made till beginning of May 2020. As per reports available from mills and ports, about 36 lac tons of sugar have moved/dispatched from the mills for export. Contracts for export of sugar are being signed, for various destinations, with major quantities being signed for exports to Indonesia and Iran. Shipments are also happening and are expected to normalize in the days to come. 

Centre has urged the mills for diversion of excess sugarcane and sugar for production of fuel Ethanol as a long term solution for addressing the problem of excess sugar stock. It is already well accepted by the ISMA, as augmentation in Ethanol capacity for the upcoming years is at different stages of progress / implementation. But, we believe that the three stakeholders i.e. sugar mills, OMC’s and commercial banks should enter into a tripartite agreement for optimum utilization of the policies and incentives to increase the production of Ethanol in coming years. 

Read More Articles: NABARD to Provide Financial Aid worth Rs 20,500 Crore for Agricultural Operations for Pre-Monsoon & Kharif