The Chodavaram Cooperative Sugar Mill is expecting a 20 per cent decline in sugarcane crushing in the current season due to low yields. The mill, which started this season’s crushing operations a few days ago, is expecting only 400,000 tonne of sugarcane arrivals.
“During the last season, about 500,000 tonne sugarcane arrived at the mill. This year, the arrivals may not exceed 400,000 tonne due to low yields and drop in the crop area in the region,” GV Ramaiah, managing director of Chodavaram Cooperative Sugar Mill, told Business Standard.
The average sugarcane production in the region stood at 18-19 tonne per acre last year. This year, production declined by two-three tonne per acre. Furthermore, the area under cultivation too plummeted by 15 per cent.
Ramaiah said the mill was expecting 10.3 recovery percentage this season, as compared with 10.1 per cent last season, which is expected to improve its profit margins.
“We produced about 500,000 quintal of sugar last year, of which 300,000 quintal has been sold so far at Rs 1,300-1,400 per quintal. We still have stocks to the extent of 200,000 quintal. Now that the prices have increased to Rs 1,750-1,800 per quintal, we expect our revenues to improve,” he said.
The mill currently has a 6.25-MU co-generation power plant. It has sold 17.8 million units of power to the state government at Rs 2.73 per unit last year. This season, the mill will be able to sell 15 million units as the can crushing is expected to decline, he said, adding that the company was spending Rs 29 crore over the next 18 months on expanding its power generating capacity by another 6.25MU.