Sugar export expected to normalise in coming days: ISMA

India's sugar export is expected to normalise in the coming days amid relaxation in the COVID-19 lockdown rules, industry body ISMA said on Monday.

The government has allowed export of 6 million tonne of sugar under maximum admissible export quota (MAEQ) during the 2019-20 marketing year (October-September) to liquidate surplus sugar in the global markets.

India has so far signed orders for shipment of 4.2 million tonnes for the 2019-20 marketing year.

Quoting market sources, Indian Sugar Mills Association (ISMA) said that contracts for export of 4.2 million tonnes of sugar have been made till the beginning of May.

As per reports available from mills and ports, about 3.6 million tonnes of sugar has been 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 normalise in the days to come," ISMA said in a statement.

In February, ISMA had said that India's sugar export may cross 5 million tonnes in the current marketing year on higher demand.

The country had exported 3.8 million tonnes during the 2018-19 marketing year.

On domestic sugar production, ISMA said it has reached 26.46 million tonnes till May 15 of the 2019-20 marketing year, much lower than 32.61 million tonnes produced till the year-ago period.

Production in Uttar Pradesh, the country's largest producer, has touched a new record of 12.22 million tonne till May 15 of the current marketing year, higher than 11.68 million tonne in the year-ago.

ISMA said mills are still operational in central and western parts of Uttar Pradesh, while some have closed crushing operations in eastern parts of the state. Most factories are expected to close by the end of this month, while few may continue till the first week of June.

The crushing season has got extended in Uttar Pradesh as most gur/khandsari units have shut operations prematurely due to the COVID-19 lockdown. Due to this, a significant quantity of cane has been diverted to mills.

Almost 80 per cent of the gur/khandsari units in the state are primarily located in western and central Uttar Pradesh.

Production in Maharashtra - the second largest producer of the sweetener - has dropped to 6.08 million tonnes so far this year, as against 10.71 million tonne in the year ago period.

Sugar output in Karnataka - the country's third largest producer - has reached 3.38 million tonnes so far this year. Mills in the state had close operations by April. However, few mills might operate in the special season commencing July 2020.

According to the food ministry, sugar production is estimated at 27.3 million tonnes in 2019-20 as against domestic consumption of 26 million tonnes.

In the previous year, sugar output was 33.1 million tonnes as compared to 25.9 million tonnes domestic demand.

On ethanol, ISMA said the 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.

The industry body said ethanol capacity augmentation for the upcoming years is at different stages of implementation.

"But, we believe that the three stakeholders - sugar mills, oil marketing companies and commercial banks - should enter into a tripartite agreement for optimum utilisation of the policies and incentives to increase the production of ethanol in the coming years," it added.