MEDIA RELEASE : SUGAR PRODUCTION UPTO 15^TH FEBRUARY, 2015

• Out of the estimated 260 lac tons of sugar in 2014-15 SS, 518 sugar mills have produced 167.08 lac tons of sugar till 15^th February, 2015.  During 2013-14 SS, 479 sugar mills had produced 145.28 lac tons of sugar in the corresponding period.  Thus, there is an increase of 21.80 lac tons of sugar or 15% during the current season over the last 2013-14 SS.

• In Uttar Pradesh, 118 sugar mills were in operation and they produced 42.25 lac tons of sugar upto 15^th February, 2015.  In 2013-14 SS, there were 119 sugar mills in operation during the same period, who had produced 35.70 lac tons of sugar. 

• In Maharashtra, there were 178 sugar mills in operation as on 15^th February 2015.  These mills together produced 65 lac tons of sugar till 15^th February, as compared to 49.80 lac tons produced by 146 sugar mills last season same period. Till 15^th February 2015, average sugar recovery in the State is 10.99%, in comparison with 11.02% last year till 15^th February.

• The third largest producer of sugar in the country viz. Karnataka produced 28.20 lac tons of sugar till 15^th February, 2015, in comparison with 27.27 lac tons of sugar produced in 2013-14 SS till 15^th February 2014.  There are 62 sugar mills in operation in the State as compared to 56 sugar mills last season same time.

• In Andhra Pradesh and Telangana, 29 sugar mills which operated this season produced 6.44 lac tons of sugar till the first fortnight of February 2015, as compared to 6.58 lac tons produced by 30 sugar mills in 2013-14 SS as on 15^th February, 2014.  Out of 29 sugar mills, 2 in Andhra Pradesh and 2 in Telangana have closed their crushing operations for the current 2014-15 SS.

• In Tamil Nadu, 40 sugar mills have started their operations for 2014-15 SS and they have produced 3.25 lac tons of sugar as on 15^th February, 2015.  During 2013-14 sugar season, 40 sugar mills which were in operation produced 5.20 lac tons in the corresponding period.

• As regards Gujarat, 19 sugar mills were in operation in the State in the first fortnight of February, which produced 7.25 lac tons.  However, last year during the same period, 17 sugar mills were in operation and they produced 7.50 lac tons of sugar. 

• In Bihar, all 11 sugar mills which are in operation produced 4.15 lac tons of sugar upto 15^th February, 2015, as compared to 3.20 lac tons produced by these mills last year same period.

• In Punjab, 16 sugar mills produced 3.15 lac tons of sugar, which is almost similar to what they produced last year during the corresponding period.  Similarly, in case of Haryana, 14 sugar mills which were in operation as on 15^th February 2015 produced 2.90 lac tons, as compared to 2.70 lac tons produced by them last year in the same period.

• In case of other States viz. Uttarakhand, Madhya Pradesh, sugar production till 15^th February 2015 was almost similar to what they produced in 2013-14 SS till 15^th February.

• ISMA is of the view that the Government should immediately take a decision on continuation of incentives on production and export of raw sugar, as was announced by the UPA Government on 28^th Feb. 2014 which was applicable for 204-15 season, but needed to be reviewed by September, 2014.   Sugar mills have to produce raw sugar, for which hardly one to one and a half months are left in the current season. 

• The mills will produce raw sugar only after export contracts are finalized.  Therefore, there is hardly any time.  It has been delayed by over 5 months now.  Till 31^st January, 2015, sugar mills in the country produced only 64000 tons of raw sugar whereas in 2013-14 SS, sugar mills had already produced 7.93 lac tons of raw sugar till 31^st January, 2014.

• Delay in announcement of export subsidy has further depressed the domestic market and sugar mills in Western and Southern part of the country have started offering white sugar even below at Rs. 2400/-  per quintal ex-factory, and in the Northern part, ex-mill prices are ruling around Rs. 2650/- per quintal.  Since start of the current crushing season, ex-mill prices in the domestic market have declined by Rs. 5-6 per kilo, and are at its lowest in the last 3-4 years. 

• Due to decline in sugar prices, sugar mills in the country are finding it difficult to generate funds for making payments to cane growers even @ FRP as also to meet their day-to-day financial requirements like payment of wages, input costs, repayment of loans to banks etc. 

• As on 15^th February, 2015, cane price arrears for the current 2014-15 SS across the country stood at Rs. 12300 crore and it seems that if the current situation continues, the ever highest cane arrear of Rs. 13000 crore would be crossed by the end of this month itself.  Cane price arrears generally peak by end of March every year.  Hence, the arrears can only increase further if nothing is done in this regard by the Government to improve ex-mill sugar prices.

• Further delay in announcement of export subsidy on raw sugar will take away the opportunity of raw exports from the Indian market and many sugar mills will not survive to crush sugarcane in the coming season, due to accumulated stock and depressed sugar prices as well as lack of adequate liquidity and cash flows.