The Hindu Business Line : Maharashtra mills bullish on raw sugar exports

Turning sweet
Maharashtra mills have so far contracted three lt of raw sugar exports through the Indian Sugar Exim Corporation.
Others such as Shree Renuka Sugars, NCS Sugars Ltd (Hyderabad), Sakuma Exports Ltd (Mumbai) and SRS Corporation are also said to be tying-up for sourcing of raw sugar.

Harish Damodaran

New Delhi, Dec. 4 Maharashtra mills are hopeful of shipping out 7-9 lakh tonnes (lt) of raw sugar in addition to 15 lt of plantation whites during the current 2007-08 crushing season (October-September).

During the 2006-07 season, the country’s sugar exports totalled 25.11 lt. This included 22.29 lt of plantation whites, 1.89 lt of raws and 0.93 lt of refined white sugar. Refined sugar produced by Indian mills have an ICUMSA value of 45, with these being 100 to 150 for plantation whites and 900 to 1,200 for raws (the higher the ICUMSA, the lesser the extent of whiteness).

State’s share

Out of the 22.29 lt of plantation white sugar exports during 2006-07, Maharashtra alone contributed 15.52 lt. The raw sugar shipments were mainly done by southern mills, while refined whites went predominantly from Uttar Pradesh.

“Twentyfive lt-plus exports is a record and all the more remarkable when you consider the ban on exports during the entire October-December period (the ban, imposed in July 2006, was lifted only in January this year),” said Mr Prakash Naiknavare, Managing Director, Maharashtra State Cooperative Sugar Factories’ Federation.

Current contracts

For the current season, Maharashtra mills have so far contracted three lt of raw sugar exports through the Indian Sugar Exim Corporation (ISEC) – a joint venture of the Indian Sugar Mills Association (ISMA) and National Federation of Cooperative Sugar Factories Ltd (NFCSFL).

“Out of the three lt, 85,000 tonnes have already been despatched and we intend delivering the full quantity by February. We plan to produce this raw sugar during October-December and shift to white sugar in January-February and then revert to raws in March-May,” Mr Naiknavare said.

Rationale

The rationale for this was that raw sugar, being hygroscopic (water-absorbing), is prone to cake formation and cannot be stored for long.

“You can produce raw sugar only against existing contracts. The contracts with ISEC for the three lt were entered around June-July. Any new contracts would basically be for beyond May-June delivery”, he added. Meanwhile, apart from ISEC, others such as Shree Renuka Sugars, NCS Sugars Ltd (Hyderabad), Sakuma Exports Ltd (Mumbai) and SRS Corporation are also said to be tying-up with Maharashtra mills for sourcing of raw sugar.

“In all, we expect to do 7-9 lt of raws and 15 lt of whites this season,” Mr Naiknavare added. The raw sugar business was a revelation because “our product has been well-received for it being totally dextran-free”. Dextran is a microbial contaminant that raises energy consumption during refining and reduces the sucrose that can be turned into sugar.

Manual operation

“We don’t have dextran because our mills do not burn cane before crushing, in order to get rid of trash prior to mechanical harvesting. Instead, the trash removal is done manually and the naked cane is cleaned and crushed within 12-14 hours. So there is no scope for the dextran-producing, sugar-hungry bacteria to get attracted to the wounds of the just-harvested or burnt cane”, he claimed.

The raw sugar from India goes mainly to refineries in neighbouring West and South-East Asian markets. Dubai alone has a capacity to refine 20 lt of raw sugar annually, with these being 15 lt in Saudi Arabia, 14 lt in Nigeria, 19.5 lt in Indonesia, 13 lt in Malaysia and 10.7 lt in Bangladesh.

Freight advantage

“Besides being dextran-free, our raw sugar enjoys a freight advantage of $35-40 a tonne over Brazil. For our mills, raw sugar manufacturing entails lower processing cost of Rs 500 a tonne over plantation whites. Moreover, we save on interest and storage cost, which comes to Rs 1,500 a tonne over 10 months,”Mr Naiknavare explained.

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