Sugar mills move for early closure of crushing, lower exports still an issue

Export target of 4 million tonnes so far is still far away

Of the estimated production of 26 million tonnes (mt) for the current sugar season, mills have produced 77 per cent, or 19.5 mt, as of February-end. So far in the current season, 107 out of the 513 sugar mills in operation have stopped crushing, according to the Indian Sugar Mills Association (Isma).

Last year, only 13 mills had ceased operations, as availability of sugarcane for crushing was low and crushing started a bit too late. The export target of 4 mt is still too far to be met. So far in the current season, 1.25 mt exports have been contracted of which 1 mt have already been moved from factories for exports.

Maharashtra’s quota in exports is fixed at 1.11 mt. Mills in the state have reportedly contracted only for around 400,000 tonnes of exports.

According to Isma, following a meeting with Union government officials on the state’s poor export performance, Maharashtra has started penalising mills in the form of higher tax for those that don’t meet their export targets. The state has decided that mills exporting 12 per cent of the current season’s production will be entitled to exemption of state purchase tax on sugarcane. In Maharashtra, sugar mills need to pay three per cent purchase tax fair and remunerative price of sugar cane, which works out to Rs 9 a quintal of sugarcane.

In Maharashtra, 177 mills have produced 7 mt of sugar till the end of February 2016, against 7.5 mt produced in 2014-15 in similar period.

Seventy-one sugar mills in the state have stopped their crushing operations due to non-availability of cane in their respective areas. About 60 of these 71 mills that have closed their operations for the season are from the rain-deficit Marathwada and Sholapur areas of the state.

In Uttar Pradesh, 116 sugar mills had started operations during 2015-16, of which 13 closed. These mills produced 5.36 mt of sugar, against 4.96 mt produced during the same period in 2014-15.