Sugar mills in Maharashtra have hit a major roadblock as trade unions and farmers? organisations have made a demand for an increase on the payment of first advance from Rs 1,500 per tonne to Rs 1,800 per tonne. The warning issued by these unions and organisations, coupled with lower availability of sugarcane, may further delay the crushing season. Nearly 154 mills, comprising 142 cooperative units and 12 private mills, are expected to participate in the crushing season against 177 mills of the last season.
As reported by FE on August 26, sugar mills usually commence crushing from October 1. The crushing season for 2008-09 which was was set to begin October 15, has been postponed to November 10.
On Saturday, Uttar Pradesh, the nation?s biggest sugar producing state, raised the state administered price (SAP) of sugarcane for the 2008-09 season by Rs 15 per quintal.
The officials of the state government and the Federation of Cooperative Sugar Factories in Maharashtra told FE on Monday, ?As per the ministers? committee, the mills are bound to pay statutory minimum price (SMP). The SMP for Maharashtra is Rs 1,076.40 per tonne. However, by deducting harvesting and transportation charges of Rs 250, the mills are expected to pay an SMP of Rs 826.40 per tonne based on an average recovery of 11.50%. The agitators should not expect the mills to declare the exact amount they can shell out at this point in time.? The officials recalled that sugar mills had incurred a cash loss of Rs 2,000 crore at the end of the crushing season in 2007-08.
Prakash Naiknavare, managing director, Federation of Cooperative Sugar Factories, said, ?Based on the financial status, each mill will definitely pay more price than last year in the second, third and fourth installments followed by the final payment for cane. The prices of sugar (Rs 1,600 per quintal), molasses (Rs 3,500 per tonne), rectified spirit (Rs 25 per litre) and bagasse (Rs 1,200 per tonne) are quite encouraging and mills will be able to pay more.?
However, the Shetkari Sanghatana and the Swabhiman Sanghatana are adamant on their stand and threatened to prevent mills from crushing cane. Besides, the state, which contributes over 30% of sugar, is expected to witness a fall in sugar output by 31 lakh tonne.
The state has projected sugar output of 57 lakh tonne to 60 lakh tonne for the 2008-09 crushing season against an output of 91 lakh tonne in 2007-08. Against the 744 lakh tonne of cane crushed last year, the mills will be able to crush only 500 lakh tonne in the current crushing season.