Cane shortage: Sugar mills advance crushing closure

Sugar mills have advanced the closure of crushing for the current season (October-September) by a month due to the unavailability of cane. While 30 per cent of operational mills have already announced closure, others are set to wind up by the end of this month.

Usually, mills continue their operations for a little over five months of a year commencing November.

However, this year was exceptional as the lack of sowing area and resultant low output, coupled with higher price offer from jaggery manufacturers, led to low sugarcane supply to mills.

“As many as 45 out of about 150 mills in Uttar Pradesh were closed last week due to inadequate supply of sugarcane. Maharashtra faces a similar situation with over 50 of over 165 private, co-operatives and corporations mills having announced closure,” an analyst said.

But, large private companies have been stretching their operations by luring farmers through various incentives, the analyst added.

For instance, industry leader Bajaj Hindusthan has been offering Rs 7.50-Rs 15 a quintal, over and above the state advised price (SAP) of Rs 137.50 a quintal of cane for the rejected variety, Rs 140 for the general variety (up from Rs 125 from last year) and Rs 145 for the early variety.

Simbhaoli Sugars, another large player in the state, has also announced a subsidy of Rs 15 per tonne to lure cane farmers not only to retain land under the crop but also to ease supply during next season.

“In the 2008-09 season, the sugarcane area in the country in general and Uttar Pradesh in particular has reduced by 25-30 per cent. To add difficulties, the cane yield has been substantially lower to the extent of 25 per cent. Furthermore, the recovery percentage of cane is lower by 0.75-1 per cent as compared to 2007-08. It is, therefore, necessary to increase the production of sugarcane and also ensure remunerative returns from the crop,” said G S C Rao, executive director, Simbhaoli Sugars.

For the first time, Uttar Pradesh has experienced crop competition for sugarcane from wheat and paddy combination owing to increase in the minimum support price (MSP) of these two crops.

The time has come when the industry has to seriously look into cane development activities to meet the milling capacities which have been created in Uttar Pradesh, Rao added.

Dwariskesh Sugar Industries’ Company Secretary B J Maheshwari said, “We have not yet announced any incentive to farmers.” but confirmed that such announcements in the state.

Only 10 per cent cane is left in the two major states for crushing for which the incentive war is going on, Maheshwari added. Dwarikesh closed one of its three sugar mills for this season and the remaining two would be shut down by the end of February, one month ahead of normal crushing season. Last year, however, mills continue crushing beyond March 31 on pressure from the government.
source:BS