Sugar output rises by 15% at 13.48 million tons in Oct-Jan

ISMA has demanded extension of export incentive on raw sugar at the earliest as mills in Maharashtra and Karnataka are in dilemma whether to produce raw sugar or not

Sugar output has risen by over 15% to 13.48 million tonnes in the first fourt months of this marketing year ending September, putting pressure on ex-mill prices and cane price payment to farmers, industry body ISMA said today.

With cane arrears already crossing Rs 11,000 crore, the industry body demanded extension of export incentive on raw sugar at the earliest as mills in Maharashtra and Karnataka are in "dilemma" whether to produce raw sugar or not.

Mills had manufactured 11.71 million tonnes of sugar in the same period of 2013-14 season (October to September).

According to Indian Sugar Mills Association (ISMA), "More than half of the sugarcane has been crushed and not much time is left in the season to produce and export enough raw sugar."

As per reports, only about 39,000 tonnes of raw sugar has been produced in the first four months of this marketing year, against 5.94 lakh tons in the year-ago, it said.

"Unless an immediate announcement of export incentive is made by the government, it would not be possible for mills and exporters to make contracts with foreign buyers," ISMA said.

Early decision is necessary to arrest further fall in ex-mill sugar prices and piling cane price arrears, which has already crossed Rs 11000 crore, it said adding that arrears could reach Rs 13,000 crore this year if measures not taken.

Last year, the Centre had announced a subsidy for exports of raw sugar up to 4 million tonnes in order to help the cash-starved industry clear sugarcane arrears to farmers. The subsidy was given in the range of Rs 2,277-3,371 per tonne. The subsidy scheme ended in September 2014.

As per ISMA data, sugar production in Maharashtra -- the country's leading producer -- rose by 30% to 5.4 million tonnes during October-January of 2014-15 marketing year, as against 4.15 million tonnes in the year-ago.

Sugar output in Uttar Pradesh -- the country's second biggest producer -- increased by 21% to 3.35 million tonnes from 2.78 million tonnes, while in Karnataka it rose marginally to 2.27 million tonnes from 2.22 million tonnes in the review period.

Sugar ouput in Bihar rose to 3,25,000 tonnes till January of this year from 2,41,000 tonnes in the year-ago, while it increased marginally in Andhra Pradesh and Telangana to 5,61,000 tonnes from 5,08,000 tonnes in the same period.

The output fell in Tamil Nadu to 1,50,000 tonnes from 3,68,000 tonnes and in Gujarat to 6,25,000 tonnes from 6,34,000 tonnes in the review period.

Mills in Uttarakhand, Punjab, Haryana produced 1,50,000 tonnes, 2,40,000 tonnes and 2,20,000 tonnes, repectively, till January of this marketing year.

Indian Sugar Mills Association (ISMA) has estimated total sugar output to be at 26 million tonnes in the ongoing 2014-15 season, as against 24.3 million tonnes last year.