In a bid to check diversion of sugarcane, which is in short supply this year, the Centre is believed to be actively toying with the idea of limiting sugarcane procurement by khandsari units. Sources said that in a recent letter written to all the sugar producing states in the country, the Centre has asked for their views on the matter. In this, the Centre has referred to a similar situation in 1989, when due to the severe shortage of cane, the khandsari units were restricted from starting operations before January.
The common thought that seems to be behind this move is that with a severe shortfall of the raw material expected this year, there would not be enough cane to be crushed by the sugar mills, leading to a further fall in the sugar production in the country. ?A idea that is doing the rounds is whether the khandsari units can be restricted from starting off operations before January 1 next year, thereby making sure that the sugar millers get adequate cane to run their operations smoothly,? says a sugarcane industry source, adding that the move gathers strength from the fact that recovery percentage of sugar by the millers is almost double of what is achieved by the khandsari units.
India?s sugarcane production in the new crop season that starts next month is expected to be not sufficient to meet the local demand because of poor acreage in major producing states. ?While almost 11% recovery is achieved by the millers, the khandsari units, which operate through the open pan procedure, are able to achieve a recovery of about 6-7%. This is a national loss,? he opines. Of the total sugarcane produced by the state, on an average about 40% of it is drawn by sugar mills, 15% goes in seeds, about 5% is consumed by khandsari units, while the rest 40% goes for making gur, juice and to be used as fodder and for chewing.
?Last year, the drawal by the gur and juice segment was 45% as they started off early in October itself, while the sugar mills started crushing in November. This year, too, the competition between sugar mills and gur and khandsari units will be stiff, with each wanting to eat into the other?s pie. Already these cottage units have pledged sugarcane growers an instant payment of Rs 170 per quintal, while mill owners are waiting for the state government to declare the state advised price (SAP),? says a sugar industry source, adding that the farmers are anyway upset with sugar mills for making delayed payments every year.
In fact, the circumstantial shortage of cane is also forcing the Centre to deliberate on whether it can re-impose the licensing order over kollus and power crushers that make gur and jaggery. ?The government had rolled back gur and jaggery units from the Essential Commodity Act two years back. But this year, it is seriously thinking of whether a law can be made to restrict them too,? said the source.
In fact, the Centre has constituted a core committee of cane commissioners of the sugar producing states, which can deliberate on the issues and come to some consensus. ?A meeting of the core committee was first held in Chennai on September 4 and then in New Delhi on September 12. After the initial discussions, all the cane commissioners have been asked to file a report, keeping in view the situation in their state.