More than 50% mills stop crushing for season 2020-21 with sugar production up by 19.06% : ISMA

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According to ISMA, 503 sugar mills were crushing sugarcane during 2020-21 SS as compared to 457 mills, which operated last year. As on date, 282 mills have stopped crushing this year. As compared to 221 mills operating as on 31st March, 2021 this year, 186 mills were operating on corresponding date last year. 277.57 lac tons of sugar have been produced till 31st March 2021 as against 233.14 lac tons produced last year by 31st March 2020, i.e. higher by about 44.43 lac tons.

In Maharashtra, sugar production till 31st March 2021 was 100.47 lac tons, compared with 59 lac tons produced last year same period. Mills therein have so far crushed about 961 lac tons of sugarcane, which is highest ever in the history of the State surpassing about 954 lac tons cane crushed in the complete 2017-18 season. The reason for lower production, despite higher crushing, as compared to 2017-18, is the lower sugar recovery and the diversion of sugarcane juice / B heavy molasses for ethanol production in the current season. So far, 113 mills have already closed their crushing operations in the State and 76 sugar mills are operating. On the corresponding date in last season, out of 146 mills that operated last year, 28 mills were in operation

A large number of mills in most regions of Maharashtra, have closed during the last one week alone. However, about 50 – 60% mills in Satara, Pune, Ahmednagar and Marathwada regions are still in operation currently.

In U.P., 120 sugar mills which were in operation, have produced 93.71 lac tons of sugar till 31st March 2021. Out of 120 sugar mills, 39 sugar mills have stopped crushing operations. As compared to this, 113 were in operation last year on the same date and the sugar production was 97.20 lac tons, upto 31st March 2020.

In case of Karnataka, till 31st March, 2021, 66 sugar mills have produced 41.39 lac tons of sugar. Out of these 66 sugar mills, 65 mills have already closed their operations in the State and only 1 mill is in operation. During the corresponding period last year, 63 sugar mills had produced 33.50 lac tons sugar, and 60 had ended their operations and 3 mills were in operation as on 31st March 2020, last year. However, in the upcoming special season in July – September,2021, a few mills in South Karnataka will operate and a total of around 42.5 lac tons of sugar is expected to be produced in the State in the current season.

Gujarat has produced 9.15 lac tons of sugar till 31st March’ 2021. Out of 15 sugar mills that operated this year, 5 sugar mills have ended their operations. Last year, similar number of sugar mills operated but 8 mills had ended their operations by 31st March, 2020 and had produced 8.50 lac tons of sugar.

In case of Tamil Nadu, 26 sugar mills commenced their crushing operations for 2020-21 SS and have produced 5.08 lac tons of sugar, as compared to 4.70 lac tons produced by 24 sugar mills in 2019-20 SS on the corresponding date.
The remaining States of Andhra Pradesh & Telangana, Bihar, Uttarakhand, Punjab, Haryana, Madhya Pradesh & Chhattisgarh, Rajasthan and Odisha have collectively produced 27.77 lac tons of sugar till 31st March, 2021.
Of the above States, Bihar, Chhattisgarh, Telangana, Rajasthan and Odisha have already closed their crushing operations for the current campaign, while others except Haryana are on the verge of closure shortly.

As per a statement put out by the Government on the web-site, as on 28th February, 2021, total cane dues of about Rs. 22,900 Crore are pending for the cane procured in the current season. It is higher as compared to arrears one year back when it was around Rs. 19,200 Crore. The prevailing low ex- mill sugar prices for last several months, has adversely affected the liquidity of mills and their ability to pay the FRP to cane farmers. The cane farmers and sugar mills are hopeful of an early announcement by the Government regarding increase in MSP of sugar as a measure to improve revenue realization by mills and payment to farmers, which will in turn ease the current situation of very high cane price arrears. Otherwise, it is feared that if current situation persists, then cane price arrears will jump very fast to alarming levels.

On the export front, Indian millers have responded well to this year’s export program, even though the MAEQ was announced in the end of December, 2020 i.e. only about 3 months back. Market reports are encouraging, which indicates that contracts of about 45 – 46 lac tons have already been made so far. Further, reportedly delayed start of mills in CS Brazil for 2021-22 season which begins on 1st April, 2021, may further improve the chances of enhanced contracts in next 1 – 2 months. Meanwhile, it is learnt that Government is working to find alternate currency exchange options to facilitate sugar exports to Iran and we are hopeful of an early solution. Further, mills are availing the provision of swap between MAEQ and domestic quota for the current 2020-21 SS, as allowed by the Government and so far about 8.8 lac tons of reallocations have already been done by the Government under this category. Pakistan Government has allowed import of 5 lac tons of sugar, and has recently permitted sugar imports from India too. This resumption of sugar imports by Pakistan will open another market for sugar exports from India and will help ensure that the target of 60 lakh tons of sugar exports is met by September, 2021.

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