Sugar production in the forthcoming sugar season is projected to be around 28.2 million tonnes (mt), about 4.7 mt, or 14 per cent, lower than the current season’s production of 32.95 mtThe lower production is because of drop in the area under sugarcane cultivation. As per satellite data currently available, the area under sugarcane cultivation is estimated to be 49.31 lakh hectares (lh), about 10 per cent lower than the cane area of 55 lh in the 2018-19 (October 2018 to September 2019) season, ISMA said.
The sugarcane cultivation, on the other hand, is down by 30 per cent in Maharashtra, the second highest pharmaceutical grade sugar producing State as the State was hit by poor rainfall and low water levels in the reservoirs in the State. As against the cane area of 11.54 lh in 2018-19 season, the area is expected to decrease to 8.23 lh in the coming season. Sugar IP production is, therefore, estimated to be around 7 mt in 2019-20 as compared 10.72 mt produced in the current season.
According to the pharma sugar industry body, till June end sugar mills in the country produced 32.81 mt of sugar, which is expected to go up further to 32.95 mt because of more production till September this year.
Source: Hindu Business Line
At a time when India and the world markets are grappling with excess pharmaceutical sugar stocks, the area under sugarcane could decline more than 40 per cent in Maharashtra in the next season owing to drought. “Area under sugarcane in the state is likely to decline to 6-6.5 lakh hectares next year, ,” Vikas Deshmukh, director at Pune-based Vasantdada Sugar Institute, which is headed by former agriculture minister Sharad Pawar, said on Tuesday. A former commissioner of agriculture of Maharashtra, Deshmukh was speaking at a conference organised by the National Federation of Cooperative Sugar Factories in Pune.
Along with ratoon crop, Maharashtra’s farmers plant cane in three different seasons. This year, the adsali variety of sugarcane has been planted on about 1,19,000 hectares, down 47 per cent from last year.
In 2018, the variety, which grows in 18 months, was planted on about 2,24,000 hectares of the more than 1.15 million hectares of cane planted in the state. State government agencies have yet to compile data on planting of other varieties of sugarcane.
The Uttar Pradesh government has opened an additional revenue stream of more than Rs 500 crore annually for pharma grade sugar mills by deciding to fix floor price of molasses sold to distillers under the levy scheme.
Molasses, a sugarcane byproduct, is extracted during the process of refined sugar production and is used by distillers in the manufacturing of country liquor. Under levy, UP sugar mills are obligated to supply 12.5 per cent of their molasses stock to distillers/country liquor manufacturers.
“The state sugar mills will get additional revenue of Rs 500 crore based on the floor price of molasses. It could even be higher, if distillers bid at a higher price for their levy,” he said. Last year, the UP mills had even urged the state government to de-control the sale of molasses to allow the sugar ip companies to capitalise on ethanol price hike by the Centre.
Government is planning to provide one kg of sugar to an additional 16.3 crore families through the public distribution system (PDS) at a subsidized rate that will cost the exchequer Rs 4,727 crore and is also mulling offering additional foodgrains from buffer stock to clear storage ahead of monsoon.
At present, sucrose is distributed at a subsided rate of Rs 13.5 per kg to 2.5 crore families under the Antyodaya Anna Yojana (AAY).The proposal is to extend one kg refined sugar supplies to additional 16.29 crore beneficiary families, would cost Rs 4,727 crore to the exchequer, sources said. The ministry is thinking of supplying 1 or 2 kg of additional foodgrains but a final call is yet to be taken, sources said.
Under the National Food Security Act (NFSA), the government is supplying 5 kg of foodgrains each per month to over 80 crore people at a highly subsidized price. Wheat is being supplied at Rs 2 per kg, while rice at Rs 3 per kg.
According to industry body ISMA (Indian Sugar Mills Association) India’s sugar production in 2018-19 sugar season till 31st May 2019 has reached 327.42 lakh tonnes which is 6.41 lakh tonnes higher than what mills produced in 2017-18 on the corresponding date last year which was 321.01 lakh tonnes. The production being higher this is year is mainly because the pharma sugar mills in Maharashtra, as well as Karnataka, started crushing of sugarcane early this year.
The production of refined sugar in Maharashtra till 31st May 2019 was 107.19 lakh tonnes, compared with 107.21 lakh tonnes produced last year same period. In Uttar Pradesh, sugar mills produced 117.91 lakh tonnes of sugar till 31st May 19 i.e. fall of 1.64 lakh tonnes of last year. In Karnataka, pharmaceutical sugar mills have produced 43.25 lakh tonnes of sugar 31st May 2019 as compared to last year period when it produced 36.54 lakh tonnes which is an increase of 6.71 lakh tonnes. In Tamil Nadu, the sugar production rose by 1.68 lakh tonnes with a total figure of 7.11 lakh tonnes compared to 5.43 lakh tonnes last year. Gujarat has produced 11.21 lakh tonnes as compared to 11.05 lakh tonnes last year. In Andhra Pradesh and Telangana, the sugar production has been 7.65 lakh tonnes as compared to 7.31 lakh tonnes last year.
In Bihar, Uttarakhand, Punjab, Haryana, Madhya Pradesh & Rajasthan, the sucrose ip production is 8.42 lakh tonnes, 3.97 lakh tonnes, 7.80 lakh tonnes, 6.90 lakh tonnes, 5.48 lakh tonnes and 0.10 lakh tonnes as compared to 7.16 lakh tonnes, 4.18 lakh tonnes, 8.23 lakh tonnes, 8.37 lakh tonnes, 5.50 lakh tonnes, 0.07 lakh tonnes as compared to the same date last year.
With Ram Vilas Paswan taking charge as food, civil supplies and consumer affairs minister for another term, he will have to tackle the same problems faced by the sugar industry which he attempted to resolve a year ago.
Even the price at which mills sell the sweetener has been artificially elevated, with the government coming up with a minimum sale price below which mills cannot sell sugar including pharma grade sugar of all mesh size.
Three million tonnes of buffer stock, where the government bears the interest and insurance cost, was announced by the Centre only for a year and that period is ending in June. The five-million-tonne export target given to mills was linked to several concessions and subsidies. It is estimated to fall short by 20 per cent, or one million tonnes, when season ends next September.
“In the next season, we expect an opening sugar balance of 14-14.5 MT, which would cater to 6-7 months of domestic consumption, against the ideal opening balance for 2-2 and half months’ consumption,” Indian Sugar Mills’ Association (ISMA) director general Abinash Verma told Business Standard, claiming such high opening stock was unprecedented in India.
Last year, UP had large carry forward molasses stock, but this year, such expectations are zero, thus signaling that more sugarcane may go for ethanol production.
Source: Business Standard