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Thursday, December 04, 2014

Sugar production surges 56% in sugar season 2014-15 upto November 2014

297 sugar mills started their crushing operations, as compared to 262 during last year at the same time 

Sugar production upto 30 November 2014, in 2014-15 sugar season is 17.81 lakh tonnes. This is 6.41 lakh tonnes or 56% more than what was produced upto the same corresponding period last year when 11.4 lakh tonnes was produced. 

As on 30 November 2014, 297 sugar mills had started their crushing operations, as compared to 262, which were operating during last year at the same time. 509 sugar mills had undertaken sugarcane crushing operations in 2013-14 season. Therefore, around 200 sugar mills have to yet start crushing operations in the current crushing season. 

Out of around 124 sugar mills in U.P, 60 sugar mills have already started their crushing operations. However, U.P. mills usually start only in the latter part of November and, therefore, only 1.2 lakh tonnes of sugar has been produced by the U.P. mills till now in the current sugar season. As compared to this, at the same corresponding period last year, 24 sugar mills had started their crushing operations and it produced just about 12000 tonnes of sugar. 

In Maharashtra, 148 sugar mills had started their crushing operations as on 30thNovember, 2014 and it produced 10.5 lakh tonnes of sugar. As compared to this, at the same corresponding period last year, 119 sugar mills had started their crushing operations when sugar production was 5.37 lakh tonnes. 

In case of Karnataka, 3.36 lakh tonnes of sugar has been produced upto 30thNovember 2014, which is almost similar to what was produced at the same corresponding period last year when 3.28 lakh tonnes of sugar was produced. Last year, about 54 sugar mills were crushing sugarcane at this time. As on 30thNovember 2014, 31 sugar mills were crushing cane in Karnataka. 

However, it is important to note that in view of the problems being faced by several sugar mills in Karnataka regarding cane price payment to the farmers for the 2013-14 sugar season, which had arisen due to adverse judgement from the Karnataka High Court, some sugar mills which had started their crushing operations had shut down their factories for some time and, therefore, the number of factories under operations as on 30 November 2014 is lower. However, with the State Government of Karnataka intervening in the matter, the sugar mills have reportedly started their crushing operations thereafter. 

The crushing operations in other States have just started and 1.6 lakh tonnes of sugar has been produced in Gujarat by 17 sugar mills, which started their crushing operations. However, in case of other States, there is a production of 1.15 lakh tonnes as on 30 November, which is slightly lower than last year at the corresponding period. 

Due to surplus availability of sugar with sugar stocks held by the sugar mills as on 1st October 2014 of 75 lakh tonnes, implying a surplus of around 20 lakh tonnes, the domestic ex-mill prices have fallen and are prevailing at the lowest in the last couple of year. 

The Government of India had announced incentives on production of raw sugar and exports thereof in February 2014 for 40 lakh tonnes of sugar upto September 2015. The Government has announced the incentive rate for such raw sugar production and exports upto 30 September 2014, but has not announced the incentive rate for October and November 2014. The sugar production has picked up in full swing across the country and, therefore, it is expected that this Government will very soon announce continuance of the incentive scheme from December 2014 onwards. 

As compared to last year when the country had opened with 93 lakh tonnes of sugar stocks as on 1st October 2013, the opening stocks in 2013-14 season is lower at 75 lakh tonnes. However, the Central Government had announced schemes in December 2013 and then in February 2014, to assist sugar industry so that the farmers get their payment. These incentive schemes had ensured that the domestic sugar prices does not crash and it in fact supported ex-mill sugar prices closer to the cost of production. However, even though the surplus sugar is substantially less now than what it was last year at this time, the domestic ex-mill sugar prices are only falling almost on daily basis because of uncertainty on the timing of announcement of continuance of incentive scheme of raw sugar production and exports thereof. The industry awaits announcement on the same.
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