Indian sugar prices slip, delay in Govt. assistance leaves market under pressure : ISMA

According to the latest report of apex body Indian Sugar Mills Association (ISMA) The average ex – mill sugar prices in most of the major States are reported to be declining with the commencement of current season w.e.f. October 2020, barring few Northern States where the prices are more or less steady. In the two major States of Maharashtra and Karnataka, the ex–mill prices which were hovering around Rs.3200-3250 per quintal for last couple of months have gone down by almost Rs.50-100 per quintal. Similarly, in the Southern States also, the ex–mill prices have declined by a similar figure. This indicates pressure in domestic market due to high opening balance, expected increase in production in the current season, delayed export programme announcement by Government and no decision yet on increase of MSP of sugar.

408 sugar mills were in operation in the country as on 30th November, 2020 and have produced 42.90 lac tons of sugar in the season 2020-21, as compared to 20.72 lac tons produced by 309 sugar mills as on 30th November, 2019. This is 22.18 lac tons higher as compared to last season’s production for the corresponding period, which is because of earlier start of sugarcane crushing this season.
Production trend in the current season so far, appears to be more or less similar to 2018-19 SS, when 418 sugar mills had produced 40.69 lac tons of sugar, as on 30th November, 2018, except that the diversion of cane juice and B-molasses this season to ethanol will be much more, resulting in a net reduction of around 20 lakh tons of sugar.

In Uttar Pradesh 111 sugar mills were crushing sugarcane on 30th November, 2020 and have produced 12.65 lac tons of sugar till that date. At the end of November, 2019 last year, similar number of sugar mills were crushing in Uttar Pradesh who had produced 11.46 lac tons. As per reports, about 28 mills are currently diverting B heavy molasses/ cane juice for production of ethanol in the current season, while during the corresponding period last season, about 18 – 20 sugar mills were diverting B heavy/cane juice.

In Maharashtra, 158 sugar mills have started crushing operations as on 30th November 2020, as compared to 71 sugar mills which operated on the corresponding date of last year. Till 30th Nov. 2020, sugar production in the State was 15.72 lac tons, compared with 1.38 lac tons produced in the State as on 30th November 2019. The higher production is because of earlier start of crushing operations in Maharashtra and higher availability of sugarcane in this season. Currently, it is reported that about 55 – 60 sugar mills are diverting B Heavy molasses/ cane juice for production of ethanol in the current season, as compared to about 25 – 30 sugar mills which were diverting B heavy/cane juice for production of ethanol, in the corresponding period last season.

In the State of Karnataka, 63 sugar mills were crushing on 30th November, 2020 and 11.11 lac tons of sugar was produced. As compared to this, last year as on 30th November, 2019, 60 sugar mills were operating who had produced 5.62 lac tons of sugar. In case of Karnataka, it is reported that about 28 – 30 sugar mills are currently diverting B heavy molasses/ cane juice for production of ethanol in the current season, as compared to about 15 – 18 sugar mills which were diverting B Heavy molasses/cane juice for production of ethanol, in the corresponding period last season.

In Gujarat, 15 sugar mills were in operation on 30th November, 2020 and have produced 1.65 lac tons of sugar, compared to 14 sugar mills who were crushing on 30th November, 2019 and had produced 62,000 tons of sugar.
Crushing operations in all the other States have also begun and the pace of crushing is picking up. About 61 sugar mills are operating in other States who have produced 1.77 lac tons in this season upto 30th November, 2020, which in the previous season was 1.64 lac tons, when 53 mills were operating as on 30th November, 2019.

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