Maharashtra, it seems, has become used to getting its sugar production projections wrong.
On September 20, the state’s minister for cooperation Subhash Deshmukh released the first output estimates for the new 2017-18 sugar season beginning October. Maharashtra’s mills were expected to crush 650 lakh tonnes (lt) of cane and produce 73 lt of sugar at an average 11.23 per cent recovery. But as the season progressed and it became apparent that production would be much higher, a second estimate was submitted on January 23. This one pegged the likely cane crushed at 796 lt, which, at a revised slightly higher recovery of 11.3 per cent, translated into a sugar output of 89.95 lt.
However, it appears that even this might turn out an underestimate. The latest data shows cane crushing during the current season, as on February 27, to have already touched 760.93 lt, with the corresponding sugar output at 83.64 lt even with a lower recovery of 10.99 per cent. Moreover, all the 185 mills in the state are still running. The Indian Express has learnt that the Maharashtra sugar commissioner’s office has now made a further upward revision in the cane crushing estimate for 2017-18 to 972.28 lt. That, even at 10.9 per cent average recovery, will result in sugar production crossing 106 lt, overtaking the record 105.14 lt achieved in 2014-15!
If the current season has been marked by underestimation, it was just the opposite in 2016-17. For that season, the first estimate by the Indian Sugar Mills Association on September 28, 2016 reckoned Maharashtra’s output at 62.7 lt. This was downgraded only a few days later, on October 5, by the state’s sugar commissioner. He projected cane crushing for the season at 445 lt and sugar production at 50.28 lt. The final figures, as it turned out, were 373.13 lt of cane crushed and a mere 42 lt of sugar output at an average recovery of 11.26 per cent!
If sugar production actually ends up being 106 lakh tonnes — or even 100 lakh tonnes-plus, forthat matter — it would amount to an unprecedented recovery within a year. No one has a clear explanation how this has happened. Either way, it has only added to the unreliability of estimates from Maharashtra.
All this is also bad news for the ruling Bharatiya Janata Party, both in Maharashtra and Uttar Pradesh. Higher than expected production means lower sugar realisations, which makes it difficult for mills to pay growers. Uttar Pradesh factories have so far brought cane worth Rs 22,231.47 crore at the state government’s average “advised” price of Rs 315 per quintal. Out of this, they were to pay Rs 19,657.17 crore within the stipulated 14 days of taking delivery. They have, however, managed to make payments of only Rs 14,623.59 crore, which translates into arrears of Rs 5,033.58 crore. Maharashtra mills have, likewise, run up cane dues of Rs 2,272.16 crore as on February 15.
Those numbers may only mount further in the coming days.