Sugar mills in Maharashtra are planning to commence crushing one month ahead of the normal season to meet the deficit during ongoing festival season.
According to sources, the state government took this decision on Thursday to start harvesting of cane mid-September for beginning of crushing on October 1 from the normal schedule of November 1.
Out of 193 mills including 166 of co-operatives and 28 private started their operations out of 193 registered with the state government. But, a number of mills may not start operations this year due to the lack of cane supply owing to 12.05 per cent fall in acreage area from 5.04 million hectares (ha) to 4.4 million ha.
Unlike in Uttar Pradesh where farmers are responsible for harvesting and transporting of cane to mills, sugar mills in Maharashtra control all pre-crushing activities depending upon their requirement.
Early harvesting is possible in Maharashtra as farmers allow crop to mature fully between 12-14 months in the state as compared to 8-10 months in Uttar Pradesh. But, it would lower overall recovery which Maharashtra has been claiming over 11.5 per cent, the highest in the country, said Amol Tilak, an analyst with the broking firm Kotak Commodity Services Ltd. Sugar recovery other states ranges between 9.5 - 11 per cent.
Meanwhile, a senior industry official estimated that mills are running out of their last year’s inventory with a total stocks are expected to remain between 3.5 - 4 million tonnes.
Last year, sugar production in the country almost halved to 14.7 million tonnes as against the country’s consumption of about 23 million tonnes. With the carry over stocks of 8-9 million tonnes from the previous year, the country is safe to meet domestic demand. During 2009-10 season, however, India’s total sugar production is estimated at 17.5 - 18 million tonnes. Since the government allowed duty-free import of raw sugar, mills is expected to import 4.5 million tonnes of raw sugar to refine and sell in domestic market.
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This means import reliance is increasing thereby, linking transnational trade of sweetener. Hence, price movement in global markets will have immediate impact locally, said Tilak.
According to a report by NCDEX Institute of Commodities Market and Research, sugar prices jumped sharply over 8.24 per cent on firm guidance from international markets where the commodity has hit multi year high. Sugar for the near month contract surged 9.43 per cent to $476 per tonne on the Intercontinental Exchange (ICE) while the commodity on the London International Financial Futures Exchange (Liffe) perked up 6.5 per cent to $492 per tonne in July.
Analysts, however, believe that the sweetener price may surge to Rs 3000 per tonne if supply is not boosted immediately, said one of the major sugar producers in Uttar Pradesh. Globally, supply deficit amid robust demand may keep prices up with the Mexican government has set a quota to import nearly 400,000 tonnes of refined sugar in 2009 to cover a shortfall.
Meanwhile, Prakash Naiknavare, Managing Director, Maharashtra State Cooperative Sugar Factories Federation Ltd. has lowered sugar production in the state at 4.7 million tonnes after crushing 410 lakh tonnes of cane from his earlier estimates of 5.2 million tonnes and 455 lakh tonnes respectively.