A fall in the global prices of sugar is deterring mills from signing fresh contracts, according to the Indian Sugar Mills Association (ISMA).
Exporters, who had entered into contracts for export of 35 lakh tonne of sugar in the 2021-2022 sugar season with most of these contracts made when the global sugar prices were in the range of 20 to 21 cents per pound of raw sugar, find the current prices of about 18.6 cents unattractive, ISMA said.
The mills were likely to enter into further contracts only when world prices increase to about 21 cents per pound, the association added.
The ISMA said that 416 sugar mills were in operation in the country as on November 30 and produced 47.21 lakh tonne of sugar in the sugar season 2021-2022 (October to September) compared with 43.02 lakh tonnes produced by 409 sugar mills during the same period last season.
The total sales in October was about 24.50 lakh tonne against the domestic sales quota of 24 lakh tonnes. This year sales are higher mainly because of easing of COVID restrictions, higher sales quota, and also higher festive demand, it said.
The oil marketing companies invited bids from ethanol manufacturers for supply of 459 crore litre of ethanol in 2021-2022 (December-November).
The ethanol manufacturers had offered almost 414 crore litre of ethanol supplies. Of this, 333 crore litre were offered by the sugar industry based on B-heavy molasses and sugarcane juice as feedstock. Almost 32 lakh tonnes of sugar equivalent diversion had been offered in the bids. The OMCs issued letters of intent for signing contracts with the ethanol manufacturers for 317 crore litre of ethanol supplies and floated a second EOI for another 142 crore litres, it said.