Maharashtra sugar mills hesitant on early start to crushing season

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Pune | Published: August 29, 2017 5:00:50 AM

Even as the Centre has turned down the demand for compensation put forth by private sugar mills in Maharashtra for starting the crushing season early, millers in the state still remain hesitant about commencing the crushing season in the first week of October.

Maharashtra sugar mills, Shivajirao Nagawade, CCEA, sugar season,  WISMAThe online system will allow the mills to upload the documents online and make the application.

Even as the Centre has turned down the demand for compensation put forth by private sugar mills in Maharashtra for starting the crushing season early, millers in the state still remain hesitant about commencing the crushing season in the first week of October. Maharashtra State Cooperative Sugar Factories Federation chairman Shivajirao Nagawade says mills may commence crushing either in the second or third week of October just before Diwali in consonance with the directives of the Centre to begin the season soon.“Usually the season begins after Diwali but this time mills may start a little early since the Centre has directed the mills to start early,” he said, adding that at least 140 mills are expected to commence crushing this season. However, a condition put forth by the Commissionerate for mills to put systems in place to treat sewage water for the grant of crushing licences could throw a spanner in the works, he said. Mills will first have to put these systems in place before applying for crushing licences, he explained.

When contacted, Maharashtra Sugar Commissioner Sambhaji Kadu Patil said that on its part the Commissionerate is ready with all preparations for the start of the crushing season. This time the Commissionerate has decided to begin an online system for granting crushing licences to millers. Until now mills usually submitted documents physically to the office of the sugar commissioner to get licences. The software for the grant of online crushing systems is ready and the necessary training sessions have already been held, he added.

Even if the season has to start on October 1, we are ready with the software. The online system will allow the mills to upload the documents online and make the application. When asked about conditions laid by the Commissionerate on the sewage treatment system, he replied that usually there are some conditions laid out before grant of crushing licences. He expected around 170-180 mills to participate in the crushing this season. Sanjeev Babar, MD of the Maharashtra State Cooperative Sugar Factories Federation said that the cane needs to mature before crushing can begin. Commencing crushing in the first week of October may affect recovery and this would ultimately mean that sugar mills would not have enough money to make cane payments to farmers. Sugar recovery has to be at least 10% for the mills to be able to make Fair and Remunerative Price ( FRP) payments to farmers which has been increased by more than The Cabinet Committee on Economic Affairs (CCEA) has agreed to fix the fair and remunerative price (FRP) for sugarcane at Rs 255 per quintal for the new sugar season (October-September). This marks a Rs 25 per quintal increase compared to the previous year. This 11% rise in FRP has taken place after two years. Last year, the government had kept prices unchanged at Rs 230 per quintal. In 2009-10, FRP was about Rs 130 per quintal.

According to Babar, if crushing begins in October, recovery could drop to 8.5%. If the recovery is around 10% then the price comes up to Rs 3,500 per tonne and if the conversion cost of Rs 750-800 per tonne is taken into account then prices come to Rs 2,700 per tonne near the FRP rate. Moreover, crushing around 74 lakh tonnes cannot be considered a bumper crop, he pointed out. At most the season may finish in 6 months, he added. If Karanataka starts the season early, mills in Kolhapur may also crush early in anticipation of the competition over cane, he said. Nagawade agreed and said that if the private mills commence early, cooperative millers may also be forced to commence early because of the scramble over cane.
B B Thombare, president, WISMA had said that the association would follow up the matter with regard to the early start of the season with the ministry. Diwali is a long festival in Maharashtra and usually is celebrated for a week and workers would be available only after this period, he said. Moreover, crushing two weeks early will impact sugar recovery, he added.

The Centre is reported to have written to the Maharashtra chief minister Devendra Fadnavis to ascertain the possibility of commencing the new crushing season in the first week of October. Last year the area under cane had shrunk to some 6.33 lakh hectares resulting in sugar production of some 41.88 lakh tonnes after crushing 372.53 lakh tonnes of cane at a recovery rate of 11.24%. This time around although July remained dry cane plantation largely remained unaffected, senior officials of the Sugar Commissionerate have said.

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