March 23, 2015
Sugaronline | http://goo.gl/pQ3QTa
Even as sugar production in India rose by 2.8 million tonnes by March 15 this year touching 22.18 million tonnes, the ex-factory price of sugar remains low compared to the procured cost of cane resulting in losses to the sugar industry, an industry official said here on Monday, according to the Indian Asian News Service.
"Each quintal of cane costs INR2,200 (US$35.3) while the ex-factory price of each quintal of white sugar is INR2,600. By crushing 100 kg of cane, only nine kg of sugar can be obtained. So one can imagine the amount of cane which goes into producing white sugar," former president of Indian Sugar Mills Association (ISMA) O.P. Dhanuka said.
He said 100 kg of sugarcane crushing also produces three kg of molasses which is priced at INR240 per quintal and is used to make liquor.
Also, 33 kg of bagasse is produced from crushing the same amount of sugarcane which fetches INR1,000 per tonne.
Dhanuka said even sale of the by-products is not sufficient to cover the losses incurred by the sugar mills.
"We are not able to pay the prices to the farmers as the ex-factory sugar prices are not remunerative enough," he said.
According to data from the association, the accumulated cane arrears due to over 50 million sugarcane growers in India from 2011/12 till now were more than INR170 billion.
He said that despite the country producing surplus sugar, it imports 500,000 tonnes which is detrimental to the domestic sugar industry.
"The duty on sugar imports was raised to 25% from 10%. However, this is not enough and should be at least 30%," he said.
ISMA said the central government has revised its sugar production estimates this year to 26.5 million tonnes, as compared to the earlier projection of 25.0 million tonnes.