Owing to the delayed start of the crushing season in Maharashtra due to recent floods and elections, domestic sugar production fell more than 50% per cent to 1.9 million tonnes (MT) till November 30, 2019, compared to almost 4.1 MT during the corresponding period last year.
According to the Indian Sugar Mills Association (ISMA), only 279 sugar mills are operational in the current 2019-20 sugar season vis-a-vis 418 units, which were crushing sugarcane till end November 2018.
The Maharashtra factor has led to a massive shortfall in this season's sugar output, as the state mills started operations after nearly a month’s delay in the third week of November 2019. So far, only 43 mills have started crushing operations producing 67,000 tonnes of the sweetener in the state compared to 175 sugar mills with total production of almost 1.9 MT last year.
In Uttar Pradesh, the country’s top sugar producer, 111 mills were crushing cane, logging total output of almost 1.1 MT compared to 105 mills with production of less than 1 MT last season.
In Karnataka, 61 sugar mills were crushing till November 30, 2019, producing 521,000 tonnes of sugar. Last year, 63 units were in operation with composite sugar production of 840,000 tonnes, the ISMA report stated.
In Gujarat too, the sugar mills started crushing operations after a delay of almost three weeks this year owing to excess rainfall caused by the southwest and also northeast monsoons. So far, 14 mills are crushing, producing 75,000 tonnes of sugar, compared to 16 mills with production tally of 205,000 tonnes in the last crushing season.
Meanwhile, crushing operations in the remaining states have also begun and the pace is gradually picking up. About 50 mills are operating in other states, clocking production of 141,000 tonnes so far in contrast to 60 mills which produced 221,000 tonnes of sugar in the corresponding period last year.
Quoting trade and market sources, ISMA said that around 1.5 MT of sugar had already been contracted for exports. This included deals with port-based refiners by mills. The major destinations for Indian sugar exports are Iran, Sri Lanka, Afghanistan, African countries etc.
The ex-mill sugar prices in northern states have continued to hover in the Rs 3,250-3,300 per quintal range over the last couple of months, while the corresponding range for the western and southern states stood at a lower level of Rs 3,100-3,250 per quintal.
In the current season, UP is estimated to account for 12 MT of sugar production or nearly 45% of the country’s estimated output in 2019-20. According to ISMA’s earlier report, the domestic sugar production is expected to fall 20 per cent to 26 MT compared a more than 33 MT in 2018-19. The cane acreage is pegged at 4.83 million hectares (MH) this year.
The estimated fall in the domestic sugar production in the current season is also partly due to the incremental increase in ethanol production, which would lead to the diversion of a portion of the domestic cane harvest for mixing in fuel.