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Upto December 15, 42.25 lakh tonnes of sugar produced in ’14-15 season
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Thursday, 18 December, 2014, 08 : 00 AM [IST]
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Our Bureau, New Delhi
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fiogf49gjkf0d In the 2014-15 sugar season, sugar production upto December 15, 2014, was 42.25 lakh tonnes. This was about 13.5 lakh tonnes more than the production upto the corresponding period in the last sugar season (28.77 lakh tonnes).
During the 2012-13 sugar season (upto December 15, 2012), 49.06 lakh tonnes of sugar were produced. The Indian sugar industry, overall, produced 251.4 lakh tonnes that season.
Compared to the 426 sugar mills which were crushing sugarcane on December 15 last year, 442 sugar mills were crushing sugarcane on December 15, 2014. On November 30, 2014, 344 sugar mills were crushing sugarcane.
Between December 1, 2014 and December 15, 2014, the sugar yield was 23.28 lakh tonnes. During the corresponding period last year, it was 17.37 lakh tonnes. The main reason is that this year, a higher number of sugar factories are already crushing sugarcane, which in turn, is because of the early start of crushing this season.
About 166 sugar mills in Maharashtra crushed sugarcane and produced 20.73 lakh tonnes upto December 15, 2014, which is slightly higher as compared to output in the corresponding period last season (12.96 lakh tonnes ), when 150 sugar mills operated in the state. Upto December 15, 2012, sugar mills in Maharashtra produced 18.8 lakh tonnes.
Sugar mills in Uttar Pradesh also produced more sugar than they did last year. About 7.94 lakh tonnes of sugar were produced by sugar mills in the state upto December 15, 2014, as compared to three lakh tonnes in the corresponding period last year.
As against the 110 sugar mills operational on December 15, 2013, 114 sugar mills are operational as of now. Most of the sugar mills in Uttar Pradesh started their crushing operations slightly late last year (in the first week of December). However, this season the crushing operations in the state commenced early and, therefore, the production was higher. Upto December 15, 2012, sugar mills in Uttar Pradesh produced 10.33 lakh tonnes.
The sugar production in Karnataka upto December 15, 2014 was similar to that of the corresponding period last year. About 53 sugar mills crushed sugarcane in the state, and produced seven lakh tonnes upto December 15, 2014. It was 7.57 lakh tonnes in the corresponding period last year, when 55 sugar mills were operational in the state.
The other states produced 6.58 lakh tonnes of sugar upto December 15, 2014. The output was 5.24 lakh tonnes in the corresponding period last year.
Ex-mill sugar prices have been continuously falling almost on a daily basis in the range of Rs 10-40 per quintal daily. The current ex-mill prices are at their lowest in the last three years, and around Rs 500-700 per quintal below the cost of producing the sugar.
Therefore, mills are facing huge challenges to even be able to pay the fair and remunerative price (FRP) of Rs 220 per quintal of sugarcane linked to 9.5 per cent sugar recovery.
It is, therefore, feared that if the ex-mill sugar prices remain at this level, the cane price arrears of farmers may start getting accumulated.
Since the ex-mill sugar prices are lower than last year but the sugarcane prices are higher, the cane price arrears (which had crossed Rs 12,500 crore in March 2014) may be higher, unless the sugar prices improve.
The incentive for raw sugar production and exports thereof (which was announced by the government in February 2014, and applicable for two sugar seasons [September 2015]) was required to be reviewed by the government before the start of the current sugar season.
Accordingly, the review should have been carried out in September 2014, but the same is awaited. Meanwhile, the global sugar prices have only fallen further (even below 15 cents per lb), making sugar exports from India unviable.
The industry and experts are anxiously waiting for the announcement about the continuation of the incentive scheme on raw sugar production and exports soon, so that mills could produce raw sugar for the purpose.
The government’s decision to adopt a fixed pricing policy for ethanol procurement and to ensure annual excise permits for movement of ethanol should go a long way in improving supplies and procurement of ethanol for the mandatory five per cent ethanol blending programme in the country.
The sugarcane crushing is in its full swing, and, therefore, sugar mills would be very eager to finalise contracts for the sale of rectified spirit, alcohol or ethanol, so that they have an adequate storage capacity for further molasses and alcohol during the season.
Therefore, the industry is anxiously awaiting tenders or invitation of expression of interest by the oil marketing companies (OMC) for deciding the supplies at oil depots.
Early tenders or invitations of expression of interest from OMC would ensure adequate ethanol supply commitment for the ethanol blending programme.
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