PRESS RELEASE – Sugar Production as on 30th November’ 2021
• 416 sugar mills were in operation in the country as on 30th November, 2021 and have produced 47.21 lac tons of sugar in the season 2021-22, as compared to 43.02 lac tons produced by 409 sugar mills as on 30th November, 2020. This is 4.19 lac tons higher as compared to last season’s production for the corresponding period, which is because of earlier start of sugarcane crushing in Western region of the country this season.
• In Uttar Pradesh, 101 sugar mills were crushing sugarcane on 30th November, 2021 and have produced 10.39 lac tons of sugar till that date. At the end of November, 2020 last year, 111 sugar mills were crushing in Uttar Pradesh who had produced 12.65 lac tons.
• In Maharashtra, 172 sugar mills have started crushing operations as on 30th November 2021, as compared to 158 sugar mills which operated on the corresponding date of last year. Till 30th Nov. 2021, sugar production in the State was 20.34 lac tons, compared with 15.79 lac tons produced in the State as on 30th November 2020. The higher production is because of earlier start of crushing operations in Maharashtra and higher availability of sugarcane in this season.
• In the State of Karnataka, 66 sugar mills were crushing on 30th November, 2021 and 12.76 lac tons of sugar was produced. As compared to this, last year as on 30th November, 2020, 63 sugar mills were operating who had produced 11.11 lac tons of sugar.
• In Gujarat, 15 sugar mills were in operation on 30th November, 2021 and have produced 1.66 lac tons of sugar. Similar number of mills were crushing on 30th November, 2020 and had produced 1.65 lac tons of sugar.
• Crushing operations in all the other States have also begun and the pace of crushing is picking up. About 62 sugar mills are operating in other States who have produced 2.06 lac tons in this season upto 30th November, 2021, which in the previous season was 1.82 lac tons, when similar number of mills were operating as on 30th November, 2020.
• As per information furnished by mills and estimations made by ISMA, total sales in the first month of current season i.e. October, 2021 was around 24.50 lac tons against domestic sales quota of 24 lac tons given by the Government. It is noteworthy that Government had increased the time period for sale of additional quota of 2.5 lac tons which was allotted for the month of September, 2021, upto 31st October, 2021. Last year, during the same period sugar sales was 22.73 lac tons as against sales quota of 23 lac tons. This year sales are higher mainly due to easing of Covid restrictions, higher sales quota (i.e., 26.50 lac tons including carry over from the month of September, 2021) and also higher festive demand.
• As per market reports and information collected from large trading houses, contracts for sugar exports for about 35 lac tons has already been contracted for exports in the current sugar season 2021-22. Most of these contracts were signed when the global sugar prices were in the range of 20-21 cents per pound of raw sugar. However, with a fall in the global prices to below 20 cents, and now to around 18.6 cents per pound of raw sugar, the Indian sugar mills are not coming forward to sign further export contracts.
• Considering the domestic ex-mill sugar prices in the western and southern part of the country and the global prices of around 20-21 cents per pound, prevailing in the last couple of months, most of the export contracts of the 35 lac tons, are by the sugar mills from Maharashtra and Karnataka. The ex-mill sugar prices in north India are slightly higher to western and southern part of the country, and therefore not much export contracts have taken place from the northern region.
• Considering the domestic ex-mill prices and the costs of the production of sugar at the increased FRP and SAP for sugarcane for 2021-22 season, it is expected that the sugar mills will enter into further export contracts only after world prices increase to around 21 cents per pound of sugar. Considering that a substantial quantity of around 34 lac tons of sugar equivalent is estimated to get diverted into ethanol production, the pressure on the sugar mills to immediately contract for further exports is less. Therefore, it seems that the sugar mills will wait for an upward revision of the global prices to around 21 cents or more.
• The OMCs invited bids from ethanol manufacturers for ethanol supply year 2021-22 (December-November) in the end of October 2021, for 459 crore litres for the targeted 10% ethanol blending with petrol for the country as a whole. The bids were opened on 12th November 2021 wherein about 414 crore litres of bids for ethanol supplies were offered by the ethanol manufacturers. Out of this, 333 crore litres has been offered by the sugar industry, based on B-heavy molasses and sugarcane juice as feedstock. This is against around 216 crore litres supplied in last ESY 2020-21, from B-heavy molasses and sugarcane juice. Therefore, as against about 20 lac tons of sugar equivalent diverted into ethanol last year, around 32 lac tons of sugar equivalent diversion had been offered in the bids.
• The OMCs have finalised and issued letters of intent for signing contracts with the ethanol manufacturers for 317 crore litres of ethanol supplies in ESY 2021-22 (against the offer of 414 crore litres). However, the OMCs have floated a second EOI for another 142 crore litres, for which the last date of submission is 3rd December 2021.