MEDIA RELEASE

• Sugar production upto 15^th December 2014, in the current 2014-15 sugar season is 42.25 lakh tons.  This is about 13.5 lakh tons more than the production in the last sugar season, upto the corresponding period, of 28.77 lakh tons. 

• Two years back i.e. during 2012-13 sugar season, upto 15^th December 2012, 49.06 lakh tons of sugar was produced Indian sugar industry on a whole had produced 251.4 lakh tons in 2012-13 season.

• As compared to 426 sugar mills which were crushing sugarcane on 15^th December last year, 442 sugar mills are crushing sugarcane on 15^th December, 2014.  15 days back on 30^th November, 2014, 344 sugar mills were crushing sugarcane.

• Sugar production in the last 15 days i.e. between 1^st December 2014 to 15^th December 2014 has been 23.28 lakh tons.  During the last year for the same corresponding period, the sugar production was 17.37 lakh tons.  The main reason is that this year higher number of sugar factories are already crushing sugarcane, which in turn, is because of early start of crushing this season.

• 166 sugar mills are crushing sugarcane in Maharashtra and have produced 20.73 lakh tons upto 15^th December 2014, which is slightly higher as compared to 12.96 lakh tons at the same time last season, when 150 sugar mills were operating in Maharashtra.

• During 2012-13 sugar season i.e. 2 years back, Maharashtra sugar mills had produced 18.8 lakh tons upto 15^th December 2012. 

• U.P. sugar mills have also produced more sugar as compared to last year.  7.94 lakh tons of sugar has been produced by U.P. sugar mills in the current season upto 15^th December, 2014, as compared to 3 lakh tons in the corresponding period last year.  As against 110 sugar mills which were operating on 15^th December 2013, 114 sugar mills are operating as of now.  Most of the sugar mills in U.P. had started their crushing operations slightly late last year i.e. in the first week of December.  However, during this season the crushing operations in U.P. have started early and, therefore, the production is higher.  Two years back, at the same time, in 2012-13 season, U.P. sugar mills had produced 10.33 lakh tons upto 15^th December 2013.

• Sugar production in Kanataka is almost similar to that in last year upto 15^th December.  53 sugar mills are crushing sugarcane in Karnataka and have produced 7 lakh tons upto 15^th December 2014, which was 7.57 lakh tons in the corresponding period last year when 55 sugar mills were operating in the State.

• The other States have produced 6.58 lakh tons of sugar upto 15^th December 2014, which was 5.24 lakh tons in the corresponding period last year.

• Ex-mill sugar prices have been continuously falling almost on a daily basis in the range of Rs. 10-40 per quintal daily.  The current ex-mill prices are at its lowest in the last 3 years and around Rs. 500-700 per quintal below the cost of producing the sugar.  Therefore, mills are facing huge challenges to even be able to pay the FRP of Rs. 220 per quintal of sugarcane linked to 9.5% sugar recovery. 

• It is, therefore, feared that if the ex-mill sugar prices remain at this level, cane price arrears of farmers may start getting accumulated.  Since ex-mill sugar prices are lower than last year but the sugarcane prices are higher, the cane price arrears which had crossed Rs. 12,500 crore in March 2014, in the last sugar season may be higher unless the sugar prices improve.

• The incentive for raw sugar production and exports thereof announced by the Government in February 2014, which was applicable for 2 sugar seasons i.e. September 2015, was required to be reviewed by the Government before the start of the current sugar season.  Accordingly, the review should have been carried out in September 2014, but the same is awaited.  Meanwhile, the global sugar prices have only fallen further (even below 15 cents/lb), making sugar exports from India unviable.  The industry and experts are anxiously waiting for the announcement of continuation of the incentive scheme on raw sugar production and exports soon, so that mills could produce raw sugar for the purpose.

• The Government’s decision to adopt a fixed pricing policy for ethanol procurement and to ensure annual excise permits for movement of ethanol should go a long way in improving supplies and procurement of ethanol for the mandatory 5% ethanol blending programme in the country.  The sugarcane crushing is in its full swing, and, therefore, sugar mills would be very eager to finalise contracts for sale of rectified spirit, alcohol or ethanol, so that they have an adequate storage capacity for further molasses and alcohol during the season.  Therefore, the industry anxiously awaits tenders or invitation of Expression of Interest by the OMCs for deciding supplies at oil depots.  An early tender or invitation of Expression of Interest from OMCs would ensure adequate ethanol supply commitment for the ethanol blending programme.