Image Credits: Live Mint/a>
Our Bureau, Mumbai
Sugar mills in the country have produced 258.06 lakh tonne of sugar during the current season upto March 15, 2018. This is 82.56 lakh tonne more than last year’s production on the same date (i e 175.50 lakh tonne).
Out of 523 sugar mills operated, 106 sugar mills in the country have already closed their operations. Of these, 31 are in Maharashtra, 48 in Karnataka, five in Uttar Pradesh, nine mills in Tamil Nadu, seven mills in Andhra Pradesh and Telangana and six mills in other states.
While Maharashtra sugar mills have produced 93.83 lakh tonne of sugar, those in Uttar Pradesh produced 84.39 lakh tonne till March 15, 2018. Karnataka sugar mills have produced 35.10 lakh tonne of sugar.
The mills in the other states have produced 44.74 lakh tonne. Of this, Gujarat has produced 9.10 lakh tonne, Bihar 5.80 lakh tonne, Haryana 5.25 lakh tonne, Punjab 5.80 lakh tonne, Andhra Pradesh and Telangana 6.40 lakh tonne, Tamil Nadu 4.20 lakh tonne, Uttarakhand 3.25 lakh tonne and Madhya Pradesh and Chhattisgarh 4.50 lakh tonne till March 15, 2018.
Ex-mill sugar prices have once again started plummeting and are now hovering between Rs 2,900 per quintal in the western and southern states and Rs 3,000 per quintal in the northern states. Sugar mills are incurring losses as compared to their cost of production of approximately Rs 3,500-3,600 per quintal. They are unable to pay the cane price to the farmers on time.
As per the figures provided by the cane commissioners of major sugar-producing states and the Government of India, the cane price arrears of farmers across the country were about Rs 14,000 crore as on January 31, 2018. With the crushing season in full swing in most of the states, considering the trend of cane price paid by the sugar mills in February and March in the last five sugar seasons, and the fact that only 30 per cent of sugar produced in these months gets sold and the rest gets stocked as unsold inventories, it is estimated that cane price arrears at the end of March 2018 may touch record levels and become uncomfortable.
Since sugar production during the current sugar season (2017-18) will be excess by 45 lakh tonne over and above the domestic requirement and anticipation of another surplus sugar year in SS 2018-19, which is to be started from October 1, 2018, India needs to export at least 20 lakh tonne of sugar in the current season and another 40-50 lakh tonne of sugar in the next season.
In order to enable mills to dispose off some of their surplus stocks during the current season itself, the Government of India needs to remove the export duty of 20 per cent on sugar with immediate effect, and announce that 20 lakh tonne of sugar will be exported under the minimum indicative export quotas (MIEQ), as was done in SS 2015-16.
The government of India should also announce the export of 40-50 lakh tonne of raw sugar well before the start of next season, so that millers could plan, produce and export raw sugar from the beginning of the next season (i e October 1, 2018), as it will reduce the burden on sugar mills carrying higher inventories for a longer period.