Maharashtra mills not to import any more raw sugar this season

Sugar mills in Maharashtra are unlikely to import additional raw sugar in the current season owing to an increase in global prices and a shorter cane-crushing period, senior industry officials said on Tuesday.

"As far as the cooperative mills in Maharashtra are concerned, the time is now over for import of raw sugar since the season this year is shorter than usual," Managing Director, Maharashtra State Cooperative Sugar Factories Federation Prakash Naiknavare said.

Naiknavare said cooperative sugar mills had imported 29,000 tonne raw sugar this season (October-September). However, they later stopped import following the rise in global prices and freight costs, he added.

"We are not in a position to import as the rates continue to be high," Member, Indian Sugar Exim Corp. Vinay Kumar said. Kumar also heads the National Federation of Cooperative Sugar Factories.

Naiknavare also said cooperative mills in Maharashtra did not have the facilities to process imported raw sugar in the off-season period.

Imported raw sugar can only be processed when the factories are functioning to crush the domestic sugarcane. The factories are likely to end their cane-crushing operations for the current season by February, Naiknavare said.

However, he said private mills with power co-generation facilities could continue to import raw sugar for processing during the off-season as well. The cane-crushing season in Maharashtra generally continues from October-end till April. At times, it even extends till June depending on the availability of sugarcane with the mills.

The cane-crushing season in Maharashtra has been shortened this year owing to lower sugarcane output on account of deficient rainfall in the state.

According to government estimates, sugar output in Maharashtra is likely to be 2.0 million tonne against the average output of 6.0 million tonne owing to lesser availability of sugarcane.

It is estimated that nearly 75 of the 154 sugar cooperatives in the state are not functioning this season due to low cane output.

In September-October, Indian Sugar Exim Corp. had imported over 100,000 tonne raw sugar at $223-233 a tonne, cost, insurance and freight for delivery this month.

Raw sugar is currently being offered by sellers abroad for over $250 a tonne CIF.

Last month, the import price of raw sugar had touched $260 a tonne.

Apart from the $250 (or Rs 11,265) a tonne cost of imported raw sugar, mills have to pay around 3,500 rupees per tonne for inland transportation and processing costs.

Import of raw sugar at the current levels is thus economically unfeasible with the ex-mill sugar prices averaging around Rs 14,600 a tonne.

In September, the government had liberalised norms for duty-free import of raw sugar for re-export after refining.

After the Indian demand for raw sugar picked up in September, prices at the New York Board of Trade shot up, thereby making imports unviable.

According to trade estimates, Indian mills had contracted import of over 200,000 tonnes raw sugar during September-October.