Cost of production will go up, affecting the finances of producers.
Sugar manufacturers are expecting yet another bad year with an unexpected fall in recovery in the early cane crop following intermittent unseasonal rainfall.
Producers in the country’s two major sugar producing states, Maharashtra and Uttar Pradesh, are struggling to decide an affordable cane price for farmers for the current crushing season.
Last year, profits made by sugar producers remained under pressure following the export ban and extra quota release which kept the price low in the second half. Sugar producers had earlier hoped for better profitability this year because of the low cane prices and high sugar prices.
Crushing units recorded between 0.5-1 per cent fall in recovery from the early cane crop that matures by October-end. The early cane crop becomes ready for harvesting by the end of October and is usually the highest recovery crop of the season.
“Due to unseasonal rainfall, especially during the harvesting season, cost of production will go up, thereby, negatively affecting the finances of the producers,” said B J Maheshwari, director of Dwarikesh Sugar, a UP-based producer.
Echoing his view, Vinay Kumar, managing director of National Federation of Cooperatives Sugar Factories (NFCSF) said although, the recovery is lower in Uttar Pradesh, a couple of day’s sunshine in the coming weeks will increase both cane yield and crushing recovery.
Meanwhile, crushing season in Maharashtra has been severely impacted. As on November 21, the 131 mills, who had started crushing, could run to capacity. As a result, only 5.51 mt of cane has been crushed, producing 0.44 million tonnes of sugar. During the same time last year, 6.28 mt cane was crushed and sugar production was 0.57 mt. The wet conditions have also affected sugar recovery which has fallen by one per cent to 8.14 per cent, against 9.14 per cent in the corresponding period last year.
The Federation of Cooperative Sugar Factories in Maharashtra, the representative body of the over 170 mills, has estimated a drop in sugar production. The Federation had estimated sugar production of 9.5 million tonnes after crushing a record 82.5 million tonnes of sugarcane by end of the current season.
“However, it is difficult to ascertain the revised estimated production. But it is quite certain that sugar production will be less than 9.5 million tones estimated earlier,” a Federation official said.
State government officials said the rain might not damage the standing cane crop but it would certainly hamper the weight of the cane, tonnage per hectare and sugar recovery.
The Federation official said due to wet conditions in the field workers could not harvest the crop as bullock carts or tractors cannot enter the wet fields. This has forced millers to scout for roadside cane fields which are small in numbers and scattered all over.
Officials of the state government and the Federation admitted that if the present conditions continue for long then the sugar industry in Maharashtra might face financial hardship — similar to what had happened in 2003 due to drought and in 2006 due to excess rainfall.
Vivek Saraogi president of Indian Sugar Mills Association and managing director of Balrampur Chini, however, it is too early to sound the alarm as they are into the first week of crushing. He, however, kept the country’s output target at the earlier estimated 25 million tonnes, nearly 6.5 million tonnes higher than the previous year.
