Sugar offtake from mills hit in last fortnight due to COVID-19: ISMA

The outbreak of COVID-19 has impacted not only the global sugar prices but also reduced offtake of the sweetener from the domestic mills in last fortnight, but the impact could be "temporary", industry body ISMA said on Tuesday. "The COVID-19 impact has also reduced sugar offtake from sugar mills in the last 15 days or so. It is understood that sugar in the pipeline would have got sold in the wholesale and retail market in the last couple of weeks," the Indian Sugar Mills Association (ISMA) said in a statement.  As per experts in the market, it is expected that fresh buying from the sugar mills may take place soon because the pipeline would have largely dried up during the last couple of weeks. That should control sugar prices and the buying should help the sugar mills, it said.

The ISMA further said: "The current unprecedented situation due to outbreak of COVID-19 has impacted the global sugar prices also. However, the impact could be temporary." Sharing the latest sugar export data, the industry body said mills have despatched almost 3 million tonnes sugar from their factories for export till March 15 of this season against the mandatory quota of 6 million tonnes. "As per market sources, about  3.6 to 3.8 million tonnes of sugar have been contracted for exports so far," it said.

The ISMA said the fall in sugar production in Thailand to the tune of 5 million tonnes as compared to last year, and the recent decision of the Indonesian Government to allow 600 ICUMSA sugar at a concessional import duty from India, Australia and Thailand gives an additional opportunity to India to export large quantities of sugar to Indonesia.   In addition, Indonesia has issued an additional import quota to its refineries and considering that sugar availability from Thailand is lower to the extent of 5 million tonnes, which will also reduce sugar exports from Thailand to Indonesia, the Indian raw sugar has a very good chance of getting exported to Indonesia. Hence, it is expected that sugar exports from India will again pick up soon, it added. On domestic sugar production, the industry body said the country has manufactured 21.58 million tonnes of sugar till March 15 of the ongoing 2019-20 season (October-September), lower than 27.36 million tonnes in the year ago period.

Sugar production in Maharashtra -- the country''s largest sugar producing state -- fell to 5.58 million tonnes till March 15, as against 10.08 million tonnes in the same period last year. About 56 mills have already closed their crushing operations in the state and only 90 sugar mills are operating. However, the daily rate of crushing in the current season is significantly lower than last year and the mills currently operating will be closing earlier than last year, ISMA said.

Whereas production in Uttar Pradesh, the country's second largest producing state, rose to 8.71 million tonnes so far when compared to 8.41 million tonnes a year ago. Mills in UP had started about 10-12 days earlier than last year, and, therefore, have produced slightly more than what they produced in the last season on March 15. It is estimated that UP will be producing similar quantity of sugar as was produced last year at around 11.8 million tonnes.

The production in Karnataka, the country's third largest sugar producing state, declined to 3.33 million tonnes as against 4.24 million tonnes in the said period. Sugar production in Gujarat touched 7,78,000 tonnes, Bihar 6,38,000 tonnes, Haryana 4,89,000 tonnes, Punjab 4,84,000 tonnes, Tamil Nadu 4,12,000 tonnes, while Andhra Pradesh and Telangana 4,00,000 tonnes, Chhattisgarh 3,85,000 tonnes and Uttarakhand 3,22,000 tonnes till March 15 of the current season..