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India Sugar Production Up 20 Percent To 233 Lakh Mt, ISMA Demands MSP Revision

3 Mar 2021 1:38 pm
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NEW DELHI (Commodities control) India has produced 233 lakh tons sugar till February 2021. The production in first five months of current season is 20 percent higher than 194.82 lakh tons sugar produced till February, 2020. Indian Sugar Mills Association (ISMA) has updated progress of sugar production in the country. The industry body urged the government to revised Minimum Selling Price (MSP) to lift market sentiments. Sugar is being traded about Rs. 100 per quintal lower than last year. The industry is also facing problem to export sugar. It succeeded to secure from orders of 32 lakh tons from various countries.

As per ISMA’s statement, During 2020-21 season (from 1 October 2020 to 28 February 2021), 502 sugar mills had started operations (as against 453 sugar mills which had operated last year till 29 th February,2020). 98 sugar mills across the country have ended their operations by 28 February 2021. Last year, 70 sugar mills had closed their crushing operations as on 29 February, 2020.

In Maharashtra, sugar production till 28 February 2021 was 84.85 lac tons, compared to 50.70 lac tons produced last year same period. In the current 2020-21 SS, out of 188 sugar mills operated, 12 sugar mills have ended their crushing due to non-availability of cane in their area, most of them in Solapur region. Last year in the same period, 25 sugar mills had ended their operations for the season 2019-20, but that was out of 145 mills that had operated last year. In other words, as on 28 February 2021, 176 sugar mills were crushing as against 120 sugar mills last year on 29 February 2020.

In U.P. 109 sugar mills are in operation currently, while 11 mills have stopped their crushing operations, most of them in Eastern U.P. region. These mills in the State have produced 74.20 lac tons of sugar till 28 February 2021, compared with 76.86 lac tons produced by 119 mills as on 29 February, 2020.

In case of Karnataka, till 28 February 2021, 66 sugar mills operated in the current season and have produced 40.53 lac tons, as compared to 32.60 lac tons produced by 63 sugar mills which operated last year, till 29 February 2020. During the current season, out of 66 mills which operated, 52 mills have already ended their crushing. Last year in the same period, out of 63 sugar mills which operated, 34 sugar mills had ended their crushing operations by 29 Feb. 2020. Gujarat has produced 7.49 lac tons of sugar till 28 February 2021. Out of 15 sugar mills operated this year, one sugar mill has ended its operation. Last year, similar number of sugar mills were in operation and they had produced 6.83 lac tons of sugar till 29 February 2020.

In case of Tamil Nadu, 26 sugar mills commenced their crushing operations so far for 2020-21 SS and have produced 3.16 lac tons of sugar, as compared to 3.37 lac tons produced by 21 sugar mills in 2019-20 SS on the corresponding date i.e. 29 February,2020. The remaining States of Andhra Pradesh & Telangana, Bihar, Uttarakhand, Punjab, Haryana, Madhya Pradesh & Chhattisgarh, Rajasthan and Odisha have collectively produced 23.54 lac tons of sugar till 28th February, 2021. 1 mill in AP, 3 mills in Telangana, 6 mills in Bihar, 5 mills in Punjab, 6 mills in MP, 1 mill in Chhattisgarh have ended their crushing operations so far in the current season.

As per market reports, the Ex-mill prices in most of the States are under pressure and are showing downward trend as average prices in Tamil Nadu are hovering between Rs. 3200 – 3225 per quintal, while in Northern states the Ex-mill prices are in the range of Rs. 3160 – 3180 per quintal. Whereas, Ex- mill prices in Maharashtra and Karnataka are reeling at MSP of sugar. The current prices are almost Rs. 80 - 100 per quintal less than that what was prevailing a year back during the corresponding period. This is not a good sign as low sugar prices, much below the cost of production for last several months, have adversely affected the liquidity of mills and their ability to pay the FRP to cane farmers. It is feared that if such situation persists then cane price arrears will jump very fast to uncomfortable levels.

One solution to this problem is the upward revision of MSP of sugar by the Government, which was last revised 2 years back when the FRP of sugarcane was at Rs. 275 per quintal. Since the Government has already increased the FRP of sugarcane by Rs. 10 per quintal for the current year, there is need to increase the MSP of sugar to Rs. 34.50 per kg. after considering the increased FRP of sugarcane for 2020-21 SS. There is need to quickly decide on increasing the MSP of sugar to ensure that sugar mills are able to pay to farmers on time.

On the export front, mills are facing problems of shortage of trucks and containers as well as adequate availability of vessels at the ports, which have already been taken up with the Government and the concerned authorities. We hope for an early solution to these problems, especially as around 32 lakh tons of export contracts have been entered into at the end of Feb’ 2021. However, the pro – active step taken by Vishakhapatnam Port Trust for provision of priority berthing of vessel intending to load export sugar is quite encouraging. We hope that other ports will also come up with such preference for sugar exports.

(By Commoditiescontrol Bureau: +91-22-40015505)

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