Amid the twin headwinds of lockdown and falling sugar demand, the domestic sugar mills have contracted for exports totalling 4.2 million tonnes (MT) till the beginning of May 2020.
Citing market sources and information from millers, Indian Sugar Mills Association (ISMA) said nearly 3.6 MT of sugar has so far been dispatched for the shipments.
The export contracts are being signed for different destinations with major quantities being signed for Indonesia and Iran.
According to ISMA, the process of shipments is expected to normalise in the days to come.
In the backdrop of the Centre nudging mills for diverting excess sugarcane and sugar for the production of fuel-grade ethanol as a long term solution for the excess sugar stock, ISMA said the augmentation in ethanol capacity is at different stages of progress or implementation.
“However, we believe that the three stakeholders viz. sugar mills, oil marketing companies (OMC) and commercial banks should enter into a tripartite agreement for optimum utilisation of the policies and incentives to increase ethanol production in the coming years,” the Association observed.
Meanwhile, ISMA today released the domestic sugar production figures for the current crushing season 2019-20, which stood at almost 26.47 MT till May 15, 2020. It is 6.15 MT lower compared to the production of 32.62 MT in the corresponding period last year.
However, compared to 38 mills which were crushing cane on May 15, 2019, 63 sugar mills
were operational on May 15, 2020.
In Uttar Pradesh, mills have produced almost 12.23 MT of sugar till May 15, compared to 11.68 MT last year. This is the highest ever sugar production in UP surpassing 12.05 MT output in 2017-18 season.
Of 119 mills, 73 units have ended their crushing and 46 mills are still operational compared to only 28 mills in the corresponding period last year. Most of these factories are expected to shut by the end of this month, while a few may continue till the first week of June.
The crushing got prolonged in UP as most of the gur (jaggery) and khandsari (unprocessed sugar) units closed their operations prematurely due to lockdown, thereby increasing the cane supply to mills. Almost 80 per cent of such rural-based units are located in the Western and Central UP.
Meanwhile, a majority of the mills in the sugar-producing states of Maharashtra, Karnataka and Gujarat are shut for the season.
In Maharashtra, sugar production stood at a little more than 6 MT compared to 10.72 MT in 2018-19, thus 4.6 MT lower. The sugar production in Karnataka stood at 3.38 MT. A few mills might operate in the special season commencing July 2020.
Following a lockdown, the closure of restaurants, mall, cinema halls etc hit the domestic offtake of sugar-sweetened products like ice cream, beverages, juices, confectioneries, sweets etc in this season, which is generally characterised with a high offtake of such products. This weakened the sugar offtake by nearly an MT so far.
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