Sugar output up 19% to 103 lakh tonne

Crushing operations in all sugar mills are in full swing due to better availability of sugarcane, says ISMA

India's sugar production rose by 19% to 103 lakh tonnes till January 15 in the current marketing year that started in October on higher sugarcane supply, according to industry data.

"Till January 15th 2015, 494 sugar mills which are in operation have produced 103 lakh tonnes of sugar as against 86.50 lakh tonnes produced in the same period last year when 486 sugar mills were in operation," Indian Sugar Mills Association (ISMA) said in a statement.

Production in Maharashtra stood at about 43 lakh tonne till January 15 of 2014-15 marketing year (October September) against 31 LT in the year-ago period.

ISMA said: "Since crushing operations in all sugar mills are in full swing due to better availability of sugarcane, their production has become higher as compared to last year."

In Uttar Pradesh, production of sugar stood at 25 LT till 15th January 2015 as against 19.75 LT in the corresponding period of previous marketing year.

In Karnataka, mills have produced 17 LT till yesterday, similar to that of last year's output.

ISMA also pointed out that the ex-mill sugar prices in all parts of the country remain depressed during last fortnight substantially below the cost of production.

"Accumulation of sugar stock, without adequate demand from the market both from domestic and global, are the main factors for declining trend in sugar prices," it said.

An all-India average ex-mills sugar prices stands at Rs 2,500-2,600 per quintal.

The association also demanded that subsidy on raw sugar exports should be extended in this marketing year as well to check sliding domestic prices of sweetener.

"Due to delay in announcement of continuation of incentive for production of and export of raw sugar, the sugar mills are not in a position to plan their raw sugar production.

"Since only 2-3 months left before the crushing operations are over, mills are eagerly waiting for the announcement from the Central Government so that they could plan accordingly," ISMA urged.

In view of low prices, ISMA felt that 15-20 lakh tonnes of sugar needs to be exported, enabling millers to clear cane arrears and repay bank loans.

It feared that the cane price arrears of farmers which had crossed Rs 13,000 crore in March last year may be higher this season if the Centre does not extend export subsidy.

Government has pegged overall sugar output at 250.5 lakh tonnes for 2014-15 marketing year, while ISMA has estimated the production at 250-255 LT.

Sugar output in India, the world's second largest producer and biggest consumer, stood at 244 lakh tonnes in the 2013-14 season.