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Maharashtra estimates sugar production of 7.34 million tonnes this year

LiveMint logoLiveMint 20-09-2017 Abhiram Ghadyalpatil

Mumbai: India’s top sugar producing state Maharashtra will begin this year’s sugarcane crushing season from 1 November. A cabinet committee on sugar headed by chief minister Devendra Fadnavis announced the date in Mumbai on Wednesday after a meeting with sugar industry representatives.

Fadnavis also issued directions to take all permissions and clearances for the sugar industry online from this season. Co-operative sugar factories have been asked to register all their members, who are farmers, online.

In the 2017-18 season, a little over 9 lakh hectares in Maharashtra has come under sugarcane cultivation, according to estimates of the state’s agriculture commissionerate and the Maharashtra State Co-operative Sugar Factories Federation. In the 2016-17 season, sugarcane was grown over a substantially low acreage of around 6.3 lakh hectares, around 37% less than Maharashtra’s average sugarcane cultivation acreage of 1 million hectares.

This season Maharashtra estimates a sugarcane yield of 72.2 million tonnes and sugar production of 7.34 million tonnes, according to a press release issued by the chief minister’s office. The 2016-17 season saw Maharashtra produce one of its lowest sugar yields--around 5 million tonnes directly as a result of a drop in cane cultivation and farmers’ shift towards pulses and oilseeds.

The estimated increase in yield is likely to result in more factories getting operational this season. The state expects around 170 sugar factories, both in the co-operative and private sectors, to operate in this crushing season.

According to Sanjeev Babar, managing director of the Maharashtra State Co-operative Sugar Factories Federation, of these 170 factories, around 80 would be from the co-operative sector and the rest would be private mills. Less than 100 factories were operational in the 2016-17 season.

Fadnavis asked the sugar factories to stick to the minimum fair and remunerative price (FRP) of Rs2,550 per tonne of sugarcane determined by the central government. The Maharashtra sugar commissioner has been asked to approve proposals by financially healthy sugar factories which have cleared their instalments of government dues in the form of taxes and debt to pay more than the FRP to the sugarcane farmers.

The FRP of Rs2,550 is mandatory assuming a 9.5% rate of recovery (the rate of conversion of per metric tonne of sugarcane into sugar. Maharashtra has had an average recovery rate of around 11%). This means if factories recover at least 9.50% of sugar from one tonne of sugarcane crushed, they will have to pay a minimum Rs2,550 per tonne to the farmer. For an additional recovery of each percentage point over 9.5%, factories are mandated to pay an additional Rs2,68 per tonne to the farmer, according to the cane price formula determined by the Centre.

The state government has decided to recommend to the Centre a restructuring of Rs6,100 crore debt owed by 90 co-operative sugar factories as of 31 March 2017.

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