Sugar output may remain low; 448 mills closed, 47 more than last year

Despite the government reducing the quantity of sugar used for ethanol from 45 lakh tonnes to 17 lakh tonnes, sugar production in the current crushing season (2023-24) is likely to be less than last year.

In the current season, till April 15, as many as 448 sugar mills across the country have been closed after completing their crushing season. This is 47 more than the same period last year.

Sugar mills are closing most rapidly in Uttar Pradesh. Till April 15, 79 sugar mills have been closed and only 40 mills are crushing whereas last year till April 15, 77 sugar mills were crushing in the state while only 40 mills were closed. Where last year sugar crushing was done in 117 mills, this year the number was 121 mills.

According to the Indian Sugar Mills Association (ISMA), the total sugar production across the country till April 15 was 310.93 lakh tonnes whereas last year till the said date the total sugar production in the country was 312.38 lakh tonnes.

This year, sugar production in the country has remained low due to reduction in sugarcane production. However, to curb the increase in prices, the government issued an order in December 2023 prohibiting the production of ethanol directly from sugarcane juice and fixed its limit at 17 lakh tonnes of sugar, whereas last year 45 lakh tonnes of diversion ethanol was done for production.

This year, 532 sugar mills had started crushing operations across the country, out of which 488 sugar mills have been closed till April 15 and crushing is going on in 84. Whereas last year the number of sugar mills crushing was 533. Of these, as of April 15, 401 sugar mills were closed while crushing was going on in 132 sugar mills.

According to ISMA, there has been an increase in the closure of sugar mills in April this year and the number of mills being closed is 128 which was 55 previously.

A major reason for the rapid closure of sugar mills in Uttar Pradesh has been the decrease in sugarcane production as well as better price of sugarcane and cash payment by the jaggery and khandsari units.

Jaggery and Khandsari units in western Uttar Pradesh offered farmers a higher price than the State Advisory Price (SAP) of Rs 370 per quintal fixed by the state government. Due to the mother of jaggery, its price crossed Rs 50 per kg and the jaggery units took advantage of this.

Along with this, till last week, a sugar mill in Shamli (UP) paid sugarcane price between Rs 400 and Rs 420 per quintal to the farmers. Also, there is still tremendous competition among sugar mills regarding sugarcane supply. In view of weak sugarcane production, most of the sugar mills in the state may be closed in the next few days, due to which sugar production will be less than last year.

On the other hand, in Maharashtra, sugarcane crop has benefited due to rains in November and December and the production there is expected to be better.