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SUGAR

Sugar crushing for ’17-18 starts early; By mid-Nov, 313 mills crushing
Tuesday, 21 November, 2017, 08 : 00 AM [IST]
Our Bureau, New Delhi
The crushing for sugar season 2017-18 has started earlier than it commenced in previous seasons. As on November 15, 2017, 313 sugar mills were already crushing, vis-a-vis the 222 sugar mills which were crushing sugarcane on November 15, 2016.

The early start of crushing has resulted in higher sugar production upto November 15, 2017 vis-a-vis the same time last year. In the first 45 days of the current season, 13.73 lakh ton of sugar were produced, vis-a-vis 7.67 lakh ton in the first 45 days of last year.

The main contributors to the higher production of sugar were the sugar mills in Uttar Pradesh and Maharashtra.

Those in the northern state produced 5.67 lakh ton of sugar upto November 15, 2017, vis-a-vis 1.93 lakh ton produced at the same time last year. Seventy-eight sugar mills were crushing sugarcane as on November 15, 2017, as against 55 sugar mills at the same time last year.

The mills in Maharashtra produced 3.26 lakh ton of sugar upto November 15, 2017 vis-a-vis 1.92 lakh ton of sugar produced at the same time last year. The number of sugar mills crushing sugarcane as on November 15, 2017 was 137, vis-a-vis the 95 that crushed sugarcane at the same time last year.  

Karnataka, the third-largest sugar producer, produced almost the same quantity as it produced last year. The situation in the other states was almost similar to last year.

The ex-mill sugar prices, which were almost flat between March and September 2017, when the all India average ex-mill sugar prices were around Rs 3,600 per quintal, has seen a fall of Rs 100-200 per quintal in various parts of the country. The fall was mostly reported for last year’s sugar, which is generally sold at a discount whenever the new season’s sugar comes into the market.

The government of India has extended the stock-holding limit on traders by two months (upto December 31, 2017), vis-a-vis six months, which was done on the last three occasions since April 2016.

Instead of witnessing an increase in sugar sales in the festival months of September and October 2017, one has seen that the poor offtake from the sugar mills has resulted in marginally lower sales of around 41 lakh ton, vis-a-vis about 42 lakh ton of sugar sales in the same two months last year.

With higher production in sugar season 2017-18, the sugar sales need to improve to ensure better cash flows and a stable sugar prices.

Now that the current season is moving into a balanced to surplus sugar production year in sugar season 2017-18, the Indian Sugar Mills’ Association (ISMA) has requested the government to withdraw the stock-holding limits on sugar traders with immediate effect.

It has been submitted that with surplus sugar availability and lower sugar offtake than expected, the continuance of the stock-holding limit on traders at this stage is affecting their buying interests.

This will affect the cash flows, which may prove detrimental to the interests of sugar producers and very soon may impact their paying capacity to the sugarcane farmers. 
 
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