Sugar production this season (October 2014-September 2015) increased to 134.83 lakh tonnes (lt) as of January 31, about 15 per cent higher than the same period a year ago, according to data released by the Indian Sugar Mills Association (ISMA).

Sugarcane arrears have crossed ₹11,000 crore and the industry has demanded that the export incentive provided last season be extended.

Mills in Karnataka and Maharashtra are “in a dilemma” to produce raw sugar.

The association estimated that so far 39,000 lt of raw sugar has been produced by mills, far lower than the 5.94 lt produced by December 31, 2013.

Further, raw sugar futures had fallen below 14.50 cents/lb after crossing 16 cents/lb in the last week of January, which made exports unviable, said ISMA.

Proposed incentives

“Consequent to reports on Food Ministry’s proposal of incentive of ₹ 4,000/tonne for 14 lt of raw sugar exports in 2014-15, ex-mill prices had improved by ₹50-60/quintal but the momentum could not continue due to delay in CCEA’s decision and gazette notification from the Government,” said an ISMA statement.

Until September last year, the Centre had provided a subsidy between ₹2,277 and ₹3,371 a tonne for exports of 40 lt of raw sugar.

State-wise output

In Maharashtra, the country’s largest sugar producing State, 175 mills produced 54 lt, up from 41.5 lt by 151 mills last season. “As per second advance estimate of ISMA… the State is likely to produce around 95 lt,” it said.

Mills in Uttar Pradesh produced 33.5 lt, up from 27.84 lt last season. The State is expected to produce 64 lt in 2014-15.

Karnataka had 63 mills engaged in crushing which produced 22.79 lt as against 22.2 lt produced by 59 mills at the same time last year.

Tamil Nadu, where crushing had been delayed due to the State government directing mills to pay a higher cane price, had produced 1.5 lt against 3.68 lt last season.

Marginal decline

Gujarat also registered a marginal decline from 6.34 lt to 6.25 lt in 2014-15. Mills in Uttarakhand, Punjab, Haryana produced 1.50 lt , 2.40 lt and 2.20 lt till 31 January 2015, respectively.

In all, 508 mills were operating as on January 31 as against 491 at the same time last season. ISMA estimates total production for the current season to be 260 lt and pegs domestic requirement of 247 lt. Surplus stocks are likely to be around 20-25 lt.

According to industry sources, Cane Commissioners of major sugar producing States had a meeting with Food Ministry officials and revised their estimates of sugar production for this season upward by 5-6 lt.

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