NEW DELHI – Confusion has gripped markets over whether mills would be able to carry out cane crushing operations this season as the nationwide lockdown, enforced to stem the spread of COVID-19, has created uncertainty over availability of raw materials needed to manufacture sugar, classified as an essential commodity in India.
With crushing operations likely to go on till mid-May in Uttar Prdaesh, mills would require raw materials such as calcium, sulphur, lime water, polypropylene bags, and phosphoric acid, apart from sugarcane. However, with borders between states sealed, mills are in a dilemma about continuous supply of these items, an industry official said.
"Sugar mills might have stocks of raw material for 8-10 days. Beyond that they may face problems if they are not allowed to move inter-state," Indian Sugar Mills Association Director General Abinash Verma said.
Farmers are also facing problems in getting labourers to harvest cane and prepare it for crushing, an official with the Uttar Pradesh Sugar Mills Association said.
The cane commissioner of the largest sugar producing state, however, said the effect of the lockdown would be clear by today.
On the other hand, traders, brokers, and buyers are facing problems in arranging for trucks, logistics of un-lifted sugar as empty trucks destined for mills are being stopped by police.
"Food chain is definitely getting disturbed. Truck drivers are being harassed by police at borders (and they) are also asking for bribes. The government should allow food supply trucks to run with a designated sticker so that 10% of trucks, which are on duty don't face any problems," said Vijay Kapoor, owner of a Muzaffarnagar-based sugar mill.
"…there is no proof with the empty truck that they belong to sugar, which is under the Essential Commodities Act… logistics of EC Act are permitted, but proper roadmap and clarifications are missing, hence police, administration is not permitting the movement of empty trucks and/or loaded trucks," the Muzaffarnagar Sugar Broker Association said in a letter to mills in the state.
Even though mills have unsold sales quota for March lying at godowns, their movement to retail stores have become a challenge, which may lead to a surge in prices in the near future, mill owner Kapoor said.
Maharashtra, the second largest sugar producer, is facing a similar situation as some trucks loaded with calcium are stuck at borders and mills are yet to crush 1.5 mln tn cane in the ongoing season.
"Labour, passage of raw materials have been restricted. Machinery is just not ready to listen to people at the ground level. Efforts are being made, and we have sensitised the cane commissioner about the issues," Maharashtra State Co-operative Sugar Factories Federation Managing Director Sanjay Khatal said.
Other than movement of sugar and raw materials required for cane crushing, movement of ethanol may also be affected due to the lockdown as it is not an essential commodity. However, alcohol and extra neutral alcohol are used to manufacture hand sanitisers and ethanol is also used in medicines and blending with petroleum.
"Movement of extra neutral alcohol and ethanol is important because if tankers get full then there will be a problem of storage, and if that arises then mills which are crushing cane currently, will have to stop their operations. These issues need to be resolved immediately by the government," ISMA's Verma said.