Lockdown effect: Sugar output till April 30 dips 20%, mills sign more export contracts

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May 2, 2020 2:20 AM

Mills in Uttar Pradesh have produced 11.65 MT as on April 30, 2020, which is 3.72 lakh tonne higher than what was produced a year ago. Of 119 mills operated this year, 44 mills have ended their crushing. As many as 75 mills are operating as against 68 mills last year till April 30.

Mills have seen an increase in sugar offtake in the past week or so of April 2020.

Sugar production from October last year till April this year in the current sugar season has declined 20% to 25.80 million tonne (MT) as compared with 32.17 MT produced in the same period last sugar season, a fall of 6.37 MT.
As many as 112 sugar mills were crushing sugarcane as on April 30 this year as against 90 mills till the same date last year, said Indian Sugar Mills’ Association (Isma) on Friday.

According to reports from mills and ports, 3.5 MT have moved/dispatched from the mills for exports. Contracts for sugar export are again being signed for various destinations, with major quantities for the exports to Indonesia and Iran. Shipments are also happening and expected to normalise.

According to Isma, 3.53 lakh tonne of maximum admissible export quantity (MAEQ) have been surrendered by some mills in April 2020. The same has been reallocated on April 30, 2020, by the government to those mills willing to export. Therefore, it is estimated that 3.53 lakh tonne will surely get exported and further contracts will get signed shortly.

The government has extended time for signing of export contracts and disptaches up to June 30, 2020, but has said thereafter MAEQ would be deducted from mills that don’t export, and will also penalise them by making them ineligible for buffer subsidy. Therefore, another round of reallocations is expected in two months, the apex body said.
As compared to last year’s sales in the first five months of the season, sugar dispatches this year till February was higher by 10.24 lakh tonne. Due to lockdown, sugar sales in March and April 2020 were lower than what was sold last year by 10 lakh tonne, bringing us back to same levels as last year.

Mills have seen an increase in sugar offtake in the past week or so of April 2020. And, it is expected sugar demand will increase as soon as the lockdown is withdrawn, especially because of demand from the traders to refill the pipeline, which is almost dry, and also of rising consumption in summer for beverages, ice-creams, juices, etc.
Timely reallocation of ethanol by OMCs to depots in states like Jharkhand, West Bengal, Madhya Pradesh, Andhra Pradesh, Telangana, Rajasthan, Gujarat, Odisha and Assam has ensured that there has not been much disruption in dispatches and the movement of ethanol as per contracts signed between OMCs and ethanol suppliers. This has given an opportunity to OMCs to test their preparedness in taking ethanol and storing the same at depots in these states, too.

With the objective of assessment of cane availability and crop condition for harvesting in the next crushing season, Isma will obtain satellite images of sugarcane area across the country in latter part of June to make its preliminary estimates.

Mills in Uttar Pradesh have produced 11.65 MT as on April 30, 2020, which is 3.72 lakh tonne higher than what was produced a year ago. Of 119 mills operated this year, 44 mills have ended their crushing. As many as 75 mills are operating as against 68 mills last year till April 30.

In Maharashtra, production was much lower at 6.06 MT as compared with 10.71 MT produced in the same period last year. In the current 2019-20, only three sugar mills were operating of the 145 mills in the state. All the operating sugar mills in Karnataka have shut operations and have produced 3.38 MT. However, a few mills might operate in the special season commencing July 2020. In Tamil Nadu, mills which were temporarily shut due to lockdown have resumed operations. As on date, 15 mills were in operation. Till April 30, production in the state was 5.41 lakh tonne as compared with 7.02 lakh tonne.

Gujarat has produced 9.02 lakh tonne and only one mill is in operation. The states of Andhra Pradesh, Telangana, Bihar, Uttarakhand, Punjab, Haryana and Madhya Pradesh, Chhattisgarh, Rajasthan and Odisha have collectively produced 3.25 MT till April 30, 2020.

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