With a bumper cane production expected during 2018-19 kharif season, the Western India Sugar Mills Association ( WISMA) — a body of private sugar mills, has urged the government of Maharashtra to make the production of raw sugar mandatory for all sugar mills in the state for the first two months to overcome the problem of excess production of whites.
In a representation to Subhash Deshmukh, Maharashtra minister for cooperation, BB Thombre, president, WISMA pointed out that during the last three years, prices of both whites and raws have been falling in the global market.
“At present, prices are at rock bottom at 10 cents per pound, he said. White sugar has almost no demand in the international market but there is good demand for raws in the Asian market mostly exported from Brazil,” Thombre said.
Logistically, India is a better placed to serve the Asian market, he said. To encourage export of raws the government should not only make production of raws mandatory for the first couple of months but also grant a production subsidy of Rs 100 per tonne, he added.
During 2016-17 season, sugar production touched 203 lakh tonnes, which increased to 320 lakh tonne in 2017-18. This shows that within a month production increased by 117 lakh tonnes.
Similarly Maharashtra produced 42.25 lakh tonnes in 2016-17 and 107 lakh tonnes in 2017-18. Production increased by 2.5 times in a year. During 2018-19 season, the country’s production is estimated to be at 355 lakh tonnes surpassing Brazil’s total production.
Maharashtra’s production is also likely to touch some 110 lakh tonnes. However, sugar prices have gone below the cost of production, Thombre said citing this as a major reason for encouraging exports of raws. The Association has also sought a transport subsidy of `2,500 per tonne on export of whites and raws at the state ports. Thombre said that sugar mills are still paying off installments on the soft loans that were taken in 2015 after several millers faced financial issues in the last one and half years.