Despite lockdown, sugar mills contract for 4.2 million tonnes of exports

3.6 MT shipped by mills so far; Indonesia, Iran major offshore destinations

Domestic sugar mills had bagged export contracts totalling 4.2 million tonnes (mt) till the beginning of May, despite the lockdown and falling sugar demand.

Citing market sources and millers, the Indian Sugar Mills Association (Isma) said that nearly 3.6 mt had been dispatched so far. 

The export orders have been signed for different destinations, with major quantities headed to Indonesia and Iran. According to Isma, shipments are expected to normalise soon. 

With the Centre nudging mills to divert excess sugarcane and sugar for production of fuel-grade ethanol as a long-term solution to the excess sugar stock, Isma said the augmentation in ethanol capacity is at different stages of implementation. 

“However, we believe the three stakeholders viz. sugar mills, oil marketing companies (OMC), and commercial banks should enter into a tripartite agreement for optimum utilisation of policies and incentives to increase ethanol production,” said Isma. Meanwhile, the association on Monday released domestic sugar production figures for the current crushing season (2019-20), which stood at almost 26.47 mt till May 15. It was 6.15 mt lower than the 32.62 mt recorded in the same period last year. 

However, compared to 38 mills crushing cane as on May 15, 2019, there were 63 mills operational as on May 15, 2020. 

In Uttar Pradesh, mills had produced 12.23 mt of sugar till May 15, compared to 11.68 mt last year. This was the highest ever production in UP, surpassing the 12.05 mt in output during the 2017-18 season. 

Of 119 mills, 73 have ended their crushing and 46 are still operational, compared to only 28 in the corresponding period last year. Most of these factories are expected to shut by the end of this month, while a few may continue till the first week of June. 

Crushing was prolonged in UP, given most of the gur (jiggery) and khandsari (unprocessed sugar) units closed operations prematurely on account of the lockdown, thereby increasing cane supply to mills. About 80 per cent of such rural-based units are in western and central UP. 

Meanwhile, majority of the mills in the sugar-producing states of Maharashtra, Karnataka, and Gujarat are shut for the season. 

In Maharashtra, production stood at above 6 mt, compared to 10.72 mt in 2018-19, thus 4.6 mt lower. Sugar production in Karnataka stood at 3.38 mt.