According to the latest reports by Indian Sugar Mills Association (ISMA), sugar mills across the country have produced 303.60 lac tons of sugar between 1st October 2020 and 15th May 2021. This is about 38.28 lac tons higher than 265.32 lac tons produced at the same time last year. However, as compared to 63 sugar mills which were crushing sugarcane on 15th May 2020, 44 sugar mills are crushing sugarcane on 15th May’ 2021 this year.
U.P. sugar mills have produced 108.70 lac tons of sugar as on 15th May’ 2021, which is 13.58 lac tons lower than the production of 122.28 lac tons produced by them last year on the corresponding date. Out of 120 mills operated this year, 99 mills have ended their crushing and 21 mills continue their operations, compared to 46 mills which were operating on 15th May’ 2020 last year. Most of the currently operating factories in the State are expected to close by the end of this month, however, a few may continue to operate in June’ 2021. Current crushing season in the Western region of the State of UP got prolonged by a few days as most of the Gur / Khandsari units have closed their operations due to lockdown restrictions, due to which some of the cane that would have gone to them, has got diverted to the sugar mills.
In Maharashtra, sugar production till 15th May 2021 was 106.16 lac tons, compared with 61.35 lac tons produced in 2019-20 SS, almost 44.81 lakh tons higher than last year. In the current 2020-21 SS, 185 mills have already closed their crushing operations in the State and 5 sugar mills are operating, while last year on the corresponding date, only one sugar mill was in operation.
All the 66 operating sugar mills in Karnataka had already closed their crushing operations by the 1st week of April,2021 and had produced 41.67 lac tons of sugar. However, few mills might operate in the special season commencing July’ 2021. During the corresponding period last year, similar to this year, all the operating sugar mills had closed their operations and had produced 33.82 lac tons sugar. However, in the special season last year, 1.12 lakh tons of sugar was made.
All but two out of 15 mills which operated in Gujarat have closed their crushing operations for the current season and have produced 10.17 lac tons of sugar as compared to 9.32 lac tons of sugar produced in 2019 – 20 SS.
As on date, in Tamil Nadu, 11 mills are in operation, out of 28 sugar mills which operated this season. Till 15th May’ 2021, sugar production in the State was 6.33 lac tons, compared with 5.80 lac tons produced on the corresponding date last year. Of the 24 sugar mills, 15 mills had ended their operations and 9 mills were in operation as on 15th May 2020, last year. Last year, during the special season, 2.00 lakh tons were produced by mills in Tamil Nadu.
The remaining States of Andhra Pradesh, Telangana, Bihar, Uttarakhand, Punjab, Haryana and Madhya Pradesh, Chhattisgarh, Rajasthan and Odisha have collectively produced 30.57 lac tons till 15th May, 2021. As on date, 5 mills are operating in Haryana, which are expected to close their crushing operations shortly.
As per port information and market reports, about 57 lac tons of contracts for export of sugar have already been entered into so far. This is 95% of the total MAEQ quantity for 2020-21 SS. Out of this, over 37 lac tons of sugar have been physically exported out of the country during Jan. 2021 and April 2021, i.e. under the MAEQ export program for 2020-21 SS which was announced on 31st December, 2020. It is also reported that another about 7 – 8 lakh tons of sugar is in pipeline to be physically exported in May 2021. In addition to the above, the sugar industry had exported 4.48 lakh tons of sugar in Oct- Dec 2020 quarter against the MAEQ of last season 2019-20.
As per information furnished by mills and estimations made by ISMA, total sales in the month of April,2021 was recorded as 23.13 lac tons against the sales quota of 22 lac tons for the respective month. Total sales in the current season upto April, 2021 are estimated at 152.61 lac tons against domestic sales quota of 147 lac tons given by the Government. Last year, during the same period sugar sales were estimated at 146.80 lac tons as against sales quota of 144 lac tons. This would mean that sales in the current year upto April,2021 are 5.81 lac tons higher or about 4% higher than the last year corresponding period. The ex-mill sugar prices have been in the range of Rs.31 – 33 per kilo for last several months. To maintain liquidity of funds, mills are under pressure to sell sugar at such low prices, not enough to be able to generate adequate funds to be able to pay the full FRP to cane farmers.
The cane farmers and sugar mills are hopeful of the much-awaited announcement by the Government regarding increase in MSP of sugar, as a measure to improve revenue realization of mills and payment to farmers. Under the current circumstances, the increase in MSP of sugar from current level of Rs.31 per kilo, which was last fixed in February 2019, seems to be the only realistic way to ensure that mills improve their cash flows and are able to effectively reduce the cane price arrears of farmers faster.
