Sugar output up 14% at 19.4 million tonne in Oct-Feb period

Cane price arrears to farmers could go up further from the current Rs 14,500 crore with sugar prices being lower than last year while cane rates higher, says ISMA

Sugar output in India, the world's second largest producer, rose by 14 per cent to 19.4 million tonnes in the first five months of the current marketing year ending September, according to industry data.

Releasing the production data for October-February period of 2014-15 marketing year, Indian Sugar Mills Association said cane price arrears to farmers could go up further from the current Rs 14,500 crore with sugar prices being lower than last year while cane rates higher.

Government should notify the decision to provide Rs 4,000 per tonne subsidy on exports of 1.4 million tonnes of raw sugar, ISMA said in statement.

"As on February 28, 2015, 511 sugar mills in the country were in operation and they produced 19.4 million tonnes of sugar, compared to 17.04 million tonnes produced by 455 sugar mills as on February 28, 2014," it said.

Industry body has projected sugar production at 26 million tonnes in the entire 2014-15 as against 24.3 million tonnes in the previous year. The annual domestic demand is seen at 24.8 million tonnes.

State-wise, Uttar Pradesh has produced 4.96 million tonnes of sugar during October 2014-February 2015 period as against 4.34 million tonnes in the year-ago period.

In Maharashtra, mills have produced about 7.4 million tonnes of sugar in the first five months of this marketing year against 5.75 million tonnes in the corresponding period of 2013-14.

Production in Karnataka rose to 3.28 million tonnes from 3.09 million tonnes in the period under review.

On export subsidy, ISMA said: "The Central Government has recently approved Rs 4,000 per tonnes of incentive for production and export of raw sugar for 1.4 million tonnes. However, the government notification is still awaited."

Noting that the global prices have fallen since the subsidy was announced, ISMA said the demand for raw sugar for export purposes is on the lower side and shipments would take place when global prices again improve by even 50 points.

On cane price payments to farmers, ISMA said: "As informed by the Food Minister in the Parliament, cane price arrears up to 15th February 2015 was Rs 14,500 crore. This is higher than even the peak arrears that were recorded in the last sugar season at Rs 13,000 crore at the end of March 2014."

"The current sugar price being lower than the last year and cane price higher, the cane price arrears are expected to go up further from the current Rs 14,500 crore," it added.