69 mills in Maha close for want of sugarcane

Written by Sanjay Jog | Mumbai | Updated: Feb 27 2009, 05:51am hrs
An inadequate sugarcane availability has forced as many as 69 of the total 145 sugar mills in Maharashtra to close down halfway in the current season. As of now, sugar mills have crushed 369.05 lakh tonne to produce 42.12 lakh tonne of sugar with a recovery of 11.41% compared to 457.78 lakh tonne with an output of 53.05 lakh tonne at 11.59% recovery in the corresponding period last year. As reported by Maharashtra, the state is expected to achieve a sugar production target of 50 lakh tonne by the end of the current crushing season compared to 91 lakh tonne, a record reduction of 45.05%. Last years crushing season was extended to June to enable the crushing of 767 lakh tonne of sugarcane.

However, industry sources told FE on Thursday, Despite the lack of availability of sugarcane, sugarcane growers are a happy lot this year as the price of sugar has become quite attractive. Farmers are getting prices of Rs 1,950 to Rs 2,000 per quintal, excluding excise, compared to last years Rs 1,250-Rs 1,350 per quintal, excluding excise, a rise of 48.148%. To top it all, the farmers are to receive realisation as high as 70%.

Sources said that in view of the current price of sugar, there was every possibility that sugar mills will be able to wipe of their cash losses of Rs 2,000 crore incurred last year. Moreover, the improved sugar price has also made farmers to shift from cultivating other crops like sunflower, soyabean, maize, cotton and paddy, to grow sugarcane. However, the mills are not going to benefit from this large-scale shift, as pre seasonal and adsali sugarcane have to be planted 15 months - 18 months before the commencement of the crushing season. Incidentally, most of the farmers are planting Suru (12 months crop) which will come up for crushing in January-February 2010. Thereby the sugar season for 2009-10 will have 15% to 25% more sugarcane availabile with an increase in sugar production. Besides, the shift from sugarcane cultivation will reflect positively in the crushing seasons of 2010-11 and 2011-12, sources added.

Prakash Naiknavare, managing director, Federation of Cooperative Sugar Factories in Maharashtra , said Though the current crushing season was some what abortive, the silver lining has been improvment in sugar prices and the farmeers move to sugarcane cultivation.

Further, Maharashtras sugar industry expects that the Centre will extend the recent decision on advance licensing for raw duty free sugar imports beyond September 2009.