Sugar output up 8 pc till Jan; Arrears to cane farmers touch Rs 20,000 cr: ISMA

Sugar production rose 8 per cent to 185 lakh tonnes in the first four months of this marketing year ending September, industry body ISMA said Monday, while cautioning that cane arrears to farmers could reach "very uncomfortable levels".

The production, is however, estimated to decline to 307 lakh tonnes in 2018-19 marketing year (October-September) from record 325 lakh tonnes in the previous year, Indian Sugar Mills Association (ISMA) said in a statement.

"It is estimated that cane price arrears across the country have reached about Rs 20,000 crore at the end of January, 2019. Considering the pace of crushing in the remaining three peak months of current 2018-19 season and if current average all India domestic ex-mill price remains at around Rs 29-30 per kilo, millers might not be able to clear the dues on time.

"It is feared that it may further increase to very uncomfortable levels by the end of April 2019," ISMA said.

The association said that ex-mill sugar prices across the country are ruling in the range of Rs 29-30 per kg, which is about Rs 5-6 per kg below the cost of production of sugar.

ISMA demanded that the Centre should increase the minimum ex-mill price of sugar to Rs 35-36 per kg so that the sugar mills could recover their costs and clear cane arrears.

"As on January 31, 2019, 514 sugar mills in the country have produced 185.19 lakh tonnes of sugar, as compared to 171.23 lakh tonnes produced by 504 mills last season on the corresponding date," ISMA said.

The higher production in the current marketing year as compared to last year is because the mills had started crushing earlier this year than the previous season, the association added.

"Considering the trend of yields, recoveries and drawal of sugarcane as also diversion of some 'B' heavy molasses to ethanol, sugar production this year is estimated to be around 307 lakh tonnes. This will be 5-6 per cent less than the sugar production of about 325 lakh tonnes in the previous season," ISMA said.

During October 2018 to January 2019, sugar production in Maharashtra stood at 70.70 lakh tonnes compared with 63.08 lakh tonnes in the year-ago period.

In Uttar Pradesh, production was 53.36 lakh tonnes till January 2019 of 2018-19 marketing year compared with 53.98 lakh tonnes in the corresponding period of the previous year.

"Sugar exports are also not happening at the desired pace. Several sugar mills are either not voluntarily willing to export sugar against their allocated export quotas or do not find it viable enough to do so. Therefore, in order to ensure that all mills fulfill their allocated export quotas, ISMA has requested that the government should enforce the quotas," the statement said.