Sugar production as on April 15, 2020 in the current sugar season (October-September) has declined by 20% to 24.78 million tonne, about 6.4 million tonne less than that of 31.17 million tonne produced in the same period during the last sugar season. Compared to 172 sugar mills that were crushing sugarcane as on April 15, 2019, only 139 sugar mills were crushing sugarcane as on same date this year, according to Indian Sugar Mills’ Association (Isma).

In a release on Thursday, Isma said that sugar sales/dispatches has got affected due to the country-wide lockdown and consequent closure of restaurants, malls, movie halls, which in turn has impacted the demand for sugar sweetened products like ice cream, beverages, juices, confectioneries and sweets. It is generally expected that the domestic pipeline, which usually holds 10-15 lakh tonne, has dried up during the lockdown, when sugar in the pipeline got used up. Hence, as soon as the lockdown is lifted, there can be an increase in sugar demand, especially from the bulk consumers when their operations resume.

The exports have been affected due to sudden drop in global sugar prices, but the recent depreciation of rupee is giving some relief to the exporters. With fresh reallocations being made by the Union food ministry in April in the MAEQ (maximum admissible export quantity), export quotas from the mills who are not exporting to mills which still want to export, more sugar will thereafter be on offer for exports.

As Indonesia opens up its market for Indian sugar, including giving the preferential lower import duty to India (along with Thailand and Australia), Indian sugar will be in high demand in Indonesia. According to the apex body, about 80-85% of sugar imports by Indonesia are from Thailand. There has been a massive drop in sugar production by 6.5 million tonne in Thailand in current season over last year. That is expected to further drop by another 1 million tonne next year. Therefore, a major portion of the unmet import demand of Indonesia will come to India, which can see a spurt from June-July and may continue for another year or so. Sugar is already getting exported to Indonesia over the last few weeks. Fall in exports during the lockdown will be therefore partially or largely be compensated by the extra sales/exports to Indonesia.

Isma further said that there were some initial problems in ethanol off-take in the initial period of the lockdown, especially when several depots of OMCs were unable to take further ethanol supplies because of drop in petrol consumption. However, with some fast response from the OMCs and its senior officials, ethanol supplies have been shifted to other states and depots, where there were hardly or nil supplies. So, ethanol has now started going to newer depots in Jharkhand, Bengal, MP, Chhattisgarh, Rajasthan, Gujarat, AP, Telangana and Kerala. Efforts are being explored to see if ethanol can be sent to Odisha and Assam too. The ethanol supplies/off-take have improved and it is expected that with newer depots taking ethanol, there will be adequate off-take as per contracts.

A majority of sugar companies decided to make hand sanitisers to supply to hospitals by using a part of the ethanol/ENA production, thereby ensuring that the country does not face any shortage of good quality hand sanitisers. Some of them are supplying the sanitisers at cost price or even free of cost. With the state excise department and state drug controllers giving full cooperation, this new segment of production of hand sanitisers has been successfully launched quickly by most of the sugar companies, Isma further said.

Meanwhile, In UP, production was at 10.82 million tonne till April 15, 2020, as compared to 10.55 million tonne produced at the same time in the last season. Out of 119 sugar mills, 21 sugar mills have stopped crushing operations and 98 were in operations this year as compared to 103 mills that were in operation last year on the same date.
It is learnt that several gur/khandsari manufacturing units in the state have closed their operations, thereby indirectly increasing the cane availability to the sugar mills for crushing in the current season by a few lakh tonne of sugarcane.

In Maharashtra, sugar production plunged to 6.01 million tonne as compared to 10.67 million tonne produced during same period last year, almost 4.66 million tonne less. In the current 2019-20 SS, 136 mills have already closed their crushing operations and only 10 sugar mills were operating. On the corresponding date in last season, 6 mills were in operation in the state.

In case of Karnataka, 63 sugar mills have produced 3.38 million tonne. All the mills have closed their operations in the state. During the corresponding period last year, 67 sugar mills had produced 4.32 million tonne. In the special season last year from July, 2019, 1.05 lakh tonne was made.

In case of Tamil Nadu, out of 24 sugar mills which operated this season, 16 sugar mills have ended their crushing, though some might operate in the special season later in the year. Till 15th April this year, sugar production was 4.95 lakh tonne as compared with 6.85 lakh tonne produced by 32 sugar mills on the corresponding date last year. In the special season last year, Tamil Nadu mills had made 2.13 lakh tonne. Gujarat has produced 8.80 lakh tonne of sugar till 15th April with 3 sugar mills in operation. Last year, 11.19 lakh tonne was produced with 2 mills in operation on the same date.

The remaining states such as Andhra Pradesh, Telangana, Bihar, Uttarakhand, Punjab, Haryana, Madhya Pradesh, Chhattisgarh, Rajasthan and Odisha have collectively produced 3.18 million tonne till 15th April, the release added.