Export demand from Indonesia will compensate fall in domestic sugar demand due to lockdown, says ISMA

Already, sugar is getting exported to Indonesia over the last few weeks. Fall in exports during the lockdown will be therefore partially or largely get compensated by the extra sales/exports to Indonesia, the release said.PUNE: Export demand from Indonesia will help compensate fall in domestic demand for sugar due to lockdown, said industry body Indian Sugar Mills Association (ISMA).

“With Indonesia opening 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 very high demand in Indonesia,” a release from ISMA said.

It added: “Sugar sales/despatches has got affected due to the country wide lockdown and consequent closure of restaurants, malls, movie halls, etc., which in turn has impacted the demand for sugar sweetened products like ice cream, beverages, juices, confectionaries, sweets etc. It is generally expected that the domestic pipeline, which usually holds 10-15 lakh tons 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.”

ISMA said that 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 Ministry of Food in April, 2020, of the MAEQ 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.

“About 80-85% of sugar imports by Indonesia are from Thailand. There has been a massive drop in sugar production by 6.5 million tons in Thailand in current season over last year. That is expected to further drop by another 1 million ton 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. Fall in exports during the lockdown will be therefore partially or largely get compensated by the extra sales/exports to Indonesia,” the release said.

There were some initial problems in ethanol offtake 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 any supplies therein. So ethanol has now started going to newer depots in Jharkhand, Bengal, MP, Chattisgarh, 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/offtake have improved and it is expected that with newer depots taking ethanol, there will be adequate offtake as per contracts.

Sugar mills across the country have produced 247.80 lac tons of sugar till 15th April 2020. This is about 64 lac tons less than 311.75 lac tons produced at the same time last year (i.e. about 20% less than last year).

However, as compared to 172 sugar mills that were still crushing sugarcane on 15th April 2019 last year, only 139 sugar mills were crushing sugarcane on 15th April 2020 this year.

In U.P., sugar mills have produced 108.25 lac tons of sugar till 15th April 2020, as compared to 105.55 lac tons 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 on 15th April 2020, 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 tons of sugarcane.

In Maharashtra, sugar production till 15th April 2020 was 60.12 lac tons, compared with 106.71 lac tons produced last year same period, almost 46.6 lakh tons less than last year. In the current 2019-20 SS, 136 mills have already closed their crushing operations in the State and only 10 sugar mills are operating. On the corresponding date in last season 6 mills were in operation in the State, who went on to add 0.49 lakh tons of sugar production last year.

In case of Karnataka, till 15th April, 2020, 63 sugar mills have produced 33.82 lac tons of sugar. All the mills have closed their operations in the State. During the corresponding period last year, 67 sugar mills had produced 43.20 lac tons sugar. Of the 67 sugar mills, 66 had ended their operations and 1 mill was in operation as on 15th April 2019, last year. In the special season last year from July,2019, 1.05 lakh tons of sugar 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 2020, sugar production in the State was 4.95 lac tons, compared with 6.85 lac tons produced by 32 sugar mills on the corresponding date last year. Of the 32 sugar mills, 17 mills had ended their operations and 15 mills were in operation as on 15th April 2019, last year. In the special season last year, Tamil Nadu mills had made 2.13 lakh tons of sugar.

Gujarat has produced 8.80 lac tons of sugar till 15th April 2020 with 3 sugar mills in operation. Last year, 11.19 lac tons of sugar had been produced with 2 mills in operation on the same date.

The remaining States as Andhra Pradesh & Telangana, Bihar, Uttarakhand, Punjab, Haryana and Madhya Pradesh & Chhattisgarh, Rajasthan, Odisha have collectively produced 31.86 till 15th April, 2020.

Source: indiatimes.com