Even as a decision was taken to commence Maharashtra’s sugar season from November 1 by the state Cabinet, sugar millers are now seeking restructuring of loans for a period of 10 years. Heavy rains in the last few days have made it difficult for them to advance the crushing operations. The millers have also sought government gaurantee to enable some of the mills to procure loans from banks since several mills are in a bad shape. According to Shivajirao Nagawade, chairman of Maharashtra State Cooperative Sugar Factories Federation (MSCSFF), several mills in the state owe dues to the tune of Rs 2,600 crore. According to Nagawade, the CM has assured the millers of taking this issue up with the Centre and the Reserve Bank of India. Now, mills in the state have to start making payments for the excise loan and the soft loan extended by the Centre. Nearly 50% of the mills in Maharashtra has the capacity to crush 2,000-2,500 tonne per day. These are making losses to the tune of Rs 10-20 crore. Those with a higher capacity are incurring losses of about Rs 30-40 crore for the season.
In an earlier representation to the Centre, Western India Sugar Mills Association (WISMA) president BB Thombare had said that the Maharashtra sugar mills were willing to commence the crushing season early in October subject to the condition that they would be compensated for the losses caused by the drop in sugar recoveries. These private millers had demanded a compensation of Rs 500 per tonne on account of the losses caused by the early cane crushing.
Normally, crushing season in Maharashtra begins after Diwali in November when cane maturity is better and the monsoons are over. The sugar recovery in November remains 10-11% and it drops to 8.5% to 9% in October. Around 650 lakh tonne of cane is expected to be crushed for the season of 2017-18 with nearly 180 mills participating in the operation. Last season, around 160 mills had crushed cane, Nagawade said.
Millers have also sought completion of the pending power purchase agreements for 500 mw. Nagawade said that the CM had told millers that the state was offering a rate of Rs 4.30 per unit while the sugar mills have been seeking Rs 6.35 per unit. Maharashtra cooperation minister Subhash Deshmukh had also told millers to be prepared to come down in terms of rates. The CM had also asked the millers to get ready for a probable downward revision in the purchase price of power. 103 mills in the state that set up co-gen plants earned Rs 1,430 crore in 2015-16. “Of their total production, about 60% units were exported to the grid, while the remaining were used for captive use.” Maharashtra sugar commissioner Sambhaji Kadu Patil said the commissionerate is ready with all preparations for the start of the season. This time, the office has decided to begin an online system for granting crushing licences to millers.