Commodity Tips, Southern sugar mills operating at 25% capacity due to chronic cane shortage
Increase in production cost, reduction in sugar prices increased pressure
Even as sugar output in India is expected to rise 25 percent this year, sugar mills in the south are reeling under low production and extremely low cane crushing capacity utilisation.
While the drought has resulted in low capacity utilisation due to lower cane availability, the mills are also having to deal with increasing fixed cost and price falls, which are impacting their financials.
According to Indian Sugar Mills Association (ISMA) data, 21 sugar mills in Andhra Pradesh and Telangana produced 190,000 tonnes of sugar till December 31, 2017, which is 16,000 tonnes lower than the sugar produced by 25 mills in 2016-17 SS (sugar season) till December 31, 2016. Sugar season is October to September.
In Tamil Nadu, 20 sugar mills are in operation, down from 34 on December 31, last year. Sugar mills in Tamil Nadu produced 170,000 tonnes of till December 31, 2017, as against 186,000 produced a year ago on the corresponding date.
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