With Tamil Nadu facing a shortfall in sugar production in 2017-18 (October-September), local markets are witnessing the arrival of stocks from Karnataka and Maharashtra.

The State’s annual estimated consumption is 12-15-lakh tonnes , and production in the coming season is estimated at about 6-lakh tonnes. The South Indian Sugar Mills Association – Tamil Nadu was hoping the Centre would allow mills in the State to import duty-free raw sugar to offset at least a portion of the shortfall. However, the Centre has allowed import of 3-lakh tonnes at an import duty of 25 per cent through ports in Tamil Nadu and Karnataka, which get the lion’s share, and some quantity through Andhra Pradesh and Maharashtra.

Mills in Tamil Nadu will process about 1.40-lakh tonnes of the imported raw sugar; Karnataka 1.10-lakh tonnes; Andhra Pradesh 34,000 tonnes; and Maharashtra 5,900 tonnes.

Tamil Nadu mills have welcomed the move to import raw sugar, as it adds a bit to the capacity utilisation and revenue in the coming season.

The shortage of cane in Tamil Nadu, due to the extended dry spell in recent years, means mills will be working at less than 30 per cent of capacity. The imported raw sugar represents a small addition, about 12-15 days of processing capacity.

Given the present pricing, with sugar selling at about ₹ 38 a kg, mills estimate they will be able to turn a profit of about ₹1-1.50 a kg on the processed raw sugar.