· Sugar Production at the end of Nov, 2012 was 2.7% lower to the production same time last year. But with crushing starting well in Uttar Pradesh, which actually commenced late, the sugar production upto 15th December, 2012 has crossed the production achieved last year upto 15th Dec. 2011, and is more by 2%, at 49.06 lac tons against 48.15 lac tons last year same time.

· 455 mills are operational as on 15th Dec, 2012, 29 less as compared to 484 mills last year.

· Maharashtra produced 18.80 lac tonne of sugar as against 18.33 lac tonne of sugar last year, with 155 mills operational to-date, 10 less than last year (14 less in the cooperative sector, but 4 more in the private). Nevertheless, capacity utilization of Maharashtra mills is better, when they have crushed more cane, as compared to last year. ISMA has estimated around 65 lac tons of sugar production from Maharashtra in 2012-13, though with a shorter season, mainly due to lower production and also diversion of sugarcane to fodder in Maharashtra. Recoveries are almost same at last year level i.e. 10%

· Uttar Pradesh has already produced 10.33 lac tons of sugar. This is about 20% less than last year same time. Last year, 121 mills were operational as against 116 mills this year. This is because a few mills is East UP have to still start their crushing. With 8.56% sugar recovery till now, it is better than last year. ISMA is expecting a total sugarcane production of 140 mln tonne, of which 85-86 mln tons would be available to the sugar industry, at about 61% drawl.

· The UP State Govt. has declared an all time high SAP for sugarcane, which is Rs. 40/qtl higher than last year. With 17% hike in SAP over last year, the cane prices offered by sugar mill i.e. the SAP, are more lucrative than the prices offered by the local sweeteners. However, even though the UP mills could have a better capacity utilisation this year and reduce the average fixed costs, the historically high SAPs in UP, leading to high costs of production, is nullifying the expected benefits. The difference between prevalent ex- mill prices and the resultant cost of production in UP, could lead to losses to mills to the tune of Rs. 4000 crore, which might reflect in the form of cane price arrears in 2012-13. ISMA has estimated 79 lac tonne of sugar production in UP in 2012-13.

· Karnataka has produced 11 lac tons of sugar against 9.05 lac tonne of sugar last year.

· Tamil Nadu & Andhra Pradesh both have produced about 25% more sugar than last year till date. TN has produced 2 lac tonne with 29 nos. of operational mills, while Andhra Pradesh with lesser no. of operational mills has produced about 1.70 lac tonne of sugar with higher cane crush but little lesser reported recoveries as compared to last year.

· ISMA is expecting that sugar millers will pay about Rs.66,000 crore for the sugarcane during 2012-13. With lower sales realization and higher sugarcane payment to farmers, ISMA has already requested Govt. to increase the import duties on raw sugar from current level to the normal rate of 60%, so as to avoid cane price arrears during the season.

· ISMA also hopes that the Government will soon accept the Rangarajan Committee recommendations on reforms on sugar sales, which will help the industry in reducing losses on account of levy sugar procurement and removing regulated release mechanism so that mills can plan their financial outflows as per market conditions.