Sugar production in Maharashtra and Karnataka was affected by floods in the 2019 monsoon season.
Sugar production in the country till April 15 was 247.8 lakh tonnes (lt), or 24.7 million tonnes, nearly 21 per cent lower than the 311.75 (lt) produced during the corresponding period of the previous sugar year, said a statement from Indian Sugar Mills Association (ISMA) on Thursday.
As many as 139 mills are still crushing sugarcane. India’s sugar year runs from October to September.
There is, however, a drop in demand for domestic consumption as well as exports following the lockdown announcement. While the closure of restaurants, malls and movie halls has impacted the production of sweetened products such as ice-creams, beverages, juices and confectioneries, affecting bulk buying of sugar, exports are hit by a sudden drop in global sugar prices, ISMA said.
“It is generally expected that the domestic pipeline, which usually holds 10-15 lt of sugar, 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 start resuming,” the sugar producers’ trade body said.
Sugar mills in Uttar Pradesh produced 108.25 lt, compared to 105.55 lt in the same period last season, while mills in Maharashtra produced 60.12 lt (106.71 lt). In Karnataka, the production this year was 33.82 lt (43.20 lt). Sugar production in both Maharashtra and Karnataka was affected by floods in the 2019 monsoon season.
Mills in other sugar-producing States, including Tamil Nadu, Bihar, Punjab, Haryana and Gujarat, produced a total of 45.61 lt this year.
The recent depreciation of the Indian rupee and opening up of markets by Indonesia, Thailand and Australia with preferential lower import duty may help Indian sugar mills export to these countries, said ISMA. This is because there is a massive 6.5-million tonne drop in production in Thailand, which accounts for 80-85 per cent of the sugar bought by Indonesia.
“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. Already, sugar is getting exported to Indonesia over the last few weeks. The fall in exports during the lockdown will be therefore partially or largely get compensated by the extra sales/exports to Indonesia,” ISMA said.
