Sugar output rises in new season

Mainly due to Karnataka mills UP output to pick up in another week, as government still to issue its floor price for cane

The country has produced nearly a million tonnes of sugar in the new season that began in October, about 20 per cent higher from the same period last year. This season’s output is estimated at 24 million tonnes (mt) by the Indian Sugar Mills Association (Isma), about nine per cent lower from last season’s 26.3 mt output. The sugar season runs from October of a calendar year to September of the next one.

“About 984,000 tonnes have been produced in the current 2012-13 season up to November 15. This is about 200,000 tonnes higher than production in the corresponding period last year,” said Isma.

The higher production is mainly from Karnataka millers. The state had produced 420,000 tonnes by November 15 against 237,000 tonnes during this period last year. Karnataka is likely to produce three mt this season.
 

SWEET PROSPECTS Sugar output in 2012-13*
States	In mn tonnes
Uttar Pradesh	7.9
Maharashtra	6.6
Karnataka	3.0
Tamil Nadu	2.4
Andra Pradesh	1.1
Gujarat	1.0
Bihar	0.5
Haryana	0.5
Punjab	0.4
Uttarakhand	0.4
All India	24.0
*First advance estimation                 Source: ISMA Note: Sugar season runs from October to September

However, against 215 mills crushing cane last year at the same time, only 178 had begun operations as on November 15. This is due to a delay in crushing operations in Uttar Pradesh, where only three mills had begun by November 15 against 43 last year, due to Diwali. Also, the state government is yet to announce its own sugarcane price (the State Advised Price or SAP), which is binding on mills. Isma says the state is likely to produce 7.9 mt of sugar in the current season.

In Maharashtra, 93 mills have started operations against 95 last year. Maharashtra is expected to produce 6.6 mt of sugar. Its government had advanced sugar crushing operations from November 1 to October 15, while also ordering a penalty on mills that began crushing before this date.

Mills paying less than the Fair and Remunerative Price for cane set by the Centre, of Rs 2,058 a tonne, would also be fined. These decisions were taken to achieve optimum use of sugarcane available and to avoid its transfer to mills offering higher prices.

A senior cane department official in UP said most mills in the western part would be operational in another week to 10 days. A sugar industry spokesperson said almost half the 125-odd mills in UP would be steaming in the next 10 days. Last year, the then government had declared an SAP on November 8, of an almost 20 per cent rise in cane prices, of Rs 240-250 a quintal.

Mills in UP have urged the government to retain the SAP at last year’s level but farmers have demanded it to be raised, citing inflation and rise in input costs, including those on fuel, labour and fertiliser. During 2011-12, total sugarcane payment in UP was Rs 18,206 crore and sugar production was 6.96 mt. This is expected to touch 7.5 mt in 2012-13. Cane payment arrears of Rs 140 crore pertaining to 2011-12 are still pending.