Sugar output up 24% in two months

Stepping steadily ahead towards a bumper production this year, sugar mills in India have reported 24 per cent more output in the first two months of the current crushing season that started on October 1.

Data compiled by the apex industry body, the Indian Sugar Mills Association (ISMA) showed India's sugar output at 2.36 million tonnes by November 30 as compared to 1.89 million tonnes produced by the same time last year. ISMA has forecast India's sugar output at 27 million tonnes this season as compared to 28.3 million tonnes last year.

High sugar output was partly attributed to more number of mills became operational this year compared to last year. ISMA said in a statement that between October and November period, 351 sugar mills started crushing this year as against 343 number of factories last year.

In fact, most sugar mills in Maharashtra started their crushing operation. To be specific 158 sugar mills started crushing sugarcane by the end of November this year as compared to 155 by same time last year. They accumulatively produced 1.29 million tonnes so far this year as compared to 1.19 million tonnes produces last year. The slightly higher sugar production is mainly because larger number of sugar mills started their crushing operation earlier this year as compared to last season.

In the case of Uttar Pradesh 66 sugar mills were crushing sugarcane by November 30, 2015 that has produced 0.18 million tonnes by November 30. At the end of November 2014, 65 operational sugar mills produced 1 million tonnes, which is slightly less than what they have done this year. The crushing in UP has just begun.

With the new season's sugar now available in the market, there are reports that contracts for exports are getting finalized faster than what was being noticed last month.

Trade sources said that sugar mills have finalized contracts for around 400,000 tonnes of contracts for exports, mostly as white sugar and that around 175,000 tonnes of sugar exports have taken place since October 1.

The sugar prices which had fallen till July 2015 since October 2014 last year, and had reached the lowest in the 6-7 years, had improved by Rs 4-5 a kg at the mill gate. However, ex-mill sugar prices have stabilized at the current levels in the last 15-20 days, said ISMA.

As compared to ex-mill sugar prices prevailing last year at the same time, the current ex-mill prices are still lower by a couple of rupees. Further, as compared to cost of production the current ex-mill prices are still lower by around Rs 5 - 6 a kg.