Private sugar mills in Maharashtra have urged Ram Vilas Paswan, Union minister for food, consumer affairs and public distribution, for a compensation of Rs 500 per tonne on account of the loss that would be caused because of lower recoveries in sugar production following an early start to the season. The Centre has issued directives to millers across the country to commence crushing of the sugar season for 2017-18 early in October to tide over any shortages during the festive season. The industry has been raising concern over possible shortage of sugar during the peak festive season in Diwali and some trade organisations have been urging the government to import sugar to prevent any spike in prices.
In a representation sent to the minister, the Western India Sugar Mills Association (WISMA) president BB Thombare said that the Maharashtra sugar mills are willing to commence the crushing season early in October. Normally, the crushing season begins after Diwali in the month of November when cane maturity is better and the monsoons are over. The sugar recovery in the month of November remains 10-11% in the state and in October , recovery drops to 8.5% to 9% only, Thombare said.
“An early start to the season in the month of October would lead to 1.5% to 2 % recovery losses to the individual mills . This would burden the economics of the debt ridden mills in the state, he pointed out. Hence the heavy losses being incurred due to an early start in sugar recovery should be compensated by an incentive of Rs 500 per tonne for the cane crushed in October since 1% of the recovery loss leads to Rs 350 per tonne of the cane crushed. Hence an average loss of recovery will be 1.5% in the month of October,” he said. “Therefore, we would urge upon you to provide sugar recovery losses of Rs 500 per tonne of cane crushed in October 2017 to the sugar mills which would ultimately help them cane payments to the farmers in time,” Thombare said.
“Usually, mills in the state commence crushing after Diwali because labourers are available only after the festival. This time however, due to drought in Beed, Marathwada and Ahmednagar regions, labourers have been in search of work and therefore commencing crushing early should not be a problem, Thombare told FE. However, sugar recovery is likely to be affected if the cane does not reach maturity, he said. Usually cane requires 13 months to reach 100% maturity and this is when sugar recoveries touch 10-10.5% and even 11% in some mills in Kolhapur, he said. A Loss of 1% on recovery means the mills suffer losses of `10 per kg and if sugar prices are calculated at Rs 35 per kg, the total losses come upto Rs 3,500 per tonne, he said.
The lack of rain in Marathwada, VIdarbha, Solapur and Ahmednagar regions is causing the cane to wither and this could lead to a loss of 25% in the crop, he said.
The first four months after cane planting is when the maximum growth happens and the girth increases in the remaining eight months, he said. This season, rains were good in the month of June and the last rainfall in this region happened on June 25. Since then there has been a dry spell, he said. This season some 67 private mills are ready to crush in October and some 4 lakh tonne of cane is expected to be crushed in October, Thombare said. In October, 30-35 mills in this region will be crushing cane.
The state is expected to produce around 73 lakh tonne of sugar at a recovery rate of 11.3%. Last year,the area under cane had shrunk to some 6.33 lakh hectares resulting in sugar production of around 41.88 lakh tonne after crushing 372.53 lakh tonne of cane at a recovery rate of 11.24%.
Earlier, the state’s biggest cooperative federation has also shared the same estimates for the season, saying that Maharashtra’s sugar output for the 2017-18 season is likely to touch 72 lakh tonne.
According to the Maharashtra State Cooperative Sugar Factories Federation, around 725 lakh tonne of cane should be available for crushing for the 2017-18 season, which is likely to result in a production of 72 lakh tonne at an average recovery rate of 11.24%.