A fraction of sugar mills start production amid pricing dispute

Out of the 518 sugar mills, 15 in Maharashtra and 13 in Karnataka have started operations

A fraction of India's sugar mills has produced 75,000 tonnes this season beginning October, with operations yet to start in the biggest cane producing state due to pricing disputes, trade and industry sources said.

Out of the 518 sugar mills in India, 15 in Maharashtra and 13 in Karnataka have started operations, slowing down production of the sweetener in the world's biggest consumer.

Mills in Uttar Pradesh, the biggest cane producing state, have delayed crushing, protesting higher government-set prices they need to pay to farmers even as sugar prices stay depressed.

"Cane crushing will be in full swing only in end-November and early December, giving us more clarity about production this year," said an industry official who did not wish to be named as he not authorised to talk to the media.

The Indian Sugar Mills Association, a body of private sugar mills, estimated in September that production this season will rise to 25.0-25.5 million tonnes from 24.3 million tonnes a year ago.

Though crushing is resuming gradually, mills have yet to sign any export deals because of lower global prices, weighed down by ample supplies in the international market.

India exported 2.1 million tonnes of sugar, mostly raws, in the last season. Shipments this season are expected at 1.0-1.5 million if the government extends export incentives like last year.

Sugar stocks on Oct. 1, when the new season began, were 7.5 million tonnes, sufficient to meet roughly four months of consumption.