India's sugar production this season has registered a decline of nearly 35 per cent at 45.81 lakh tonnes against 70.54 lakh tonnes as on December 15, 2019, industry body Indian Sugar Mills Association said on Wednesday.
The decline is largely due to a delayed onset of crushing season this year in a majority of the states including Maharashtra and Karnataka as also lower yield from the crops that were damaged due to unseasonal rains in the region in October and November this year. The deficit, however, has come down compared to mid and end-November when production was down by 64 per cent and 53 per cent, respectively. Higher production in Uttar Pradesh, country's largest sugar producing state, which has so far produced 21.25 lakh tonnes (12.2 percent more than last year), is the main reason for the decline in deficit.
"In Maharashtra, 124 sugar mills are in operation and they have produced 7.66 lakh tons of sugar till December 15, 2019. In 2018-19 SS, there were 178 sugar mills in operation as on December 15, 2018 and they had produced 29 lakh tons. In the third largest producer of sugar Karnataka, 63 sugar mills are in operation, which have produced 10.62 lakh tons of sugar till December 15, 2019. This is about 3.32 lakh tons less than the sugar production in 2018-19 SS as on December 15, 2018," ISMA said.
"Production in the two states is lower than last year due to the fact that mills in these states started late by one month and one week, respectively. Apart from this, sugar recovery so far is reported to be lower as compared to last year, mainly because mills are crushing damaged sugarcane due to floods, along with the fresh cane as also other climatic factors," it added.
Production has been low in other states as well. In Gujarat, 15 sugar mills are in operation and have produced 1.52 lakh tons of sugar against 3.10 lakh tons last year. Similarly in Andhra Pradesh and Telangana, 14 sugar mills have started crushing producing about 0.30 lakh tons of sugar till date against 18 sugar mills last year that had produced 1.05 lakh tons. In Tamil Nadu, only six sugar mills have started crushing till now with a production of about 0.73 lakh tons, as compared to 16 mills accounting for 0.87 lakh tons last year.
In four other states - Bihar, Punjab, Haryana and Madhya Pradesh - a total of 57 mills are operational, producing 3.1 lakh tonnes, cumulatively.
At the start of the season, ISMA had forecast a decline by 21.6 per cent, the steepest fall in a year in over a decade, at 26 million tonnes for the full year. A record 33.16 million tonnes of sugar was produced in 2018-19. The fall in production, however, is not a bad thing for the industry that has faced a glut situation in the domestic market for much of the last five years. The oversupply has kept sugar prices low impacting profitability of the industry, which in turn has impaired their capacity to pay farmers. Sugar mills across the country owe around Rs 15,000 crore to sugarcane farmers.