Increased demand for Indian sugarNSE -0.86 % has driven up export deals signed by domestic millers to about 3.5 lakh tonnes, according to the All India Sugar Traders Association (AISTA). However, full-fledged production and dispatches may commence only after Diwali, which falls on November 7 this year, because of agitations by organisations representing farmers and labourers.
With a further rise in raw sugar prices, millers are now being offered Rs 1,950 per quintal for raw sugar and Rs 2,100 per quintal for white sugar exmill, said AISTA chairman Praful Vithlani. But barring a couple of mills, most of the sugar millsNSE -0.76 % from Kolhapur belt may begin crushing operations only after Diwali, said Vijay Autade, a sugar industry expert. “As farmers’ organisations do not let the mills begin operations till their demands are met, mills cannot afford to compensate for the harvesting and transportation labour which remains idle.”
The Maharashtra government has started issuing the mandatory crushing licences required for the mills to begin production in the country’s top sugar producing state. More than 30 of the 196 mills which will operate this season have taken licences from the state’s sugar commissionerate, said officials.
A few mills from Pune and Ahmednagar region will kick-start crushing operations this week. However, Kolhapur-Sangli region, which accounts for about a quarter of the state’s sugar production, will have to wait to commence crushing of sugarcane, according to the industry. Mills from Marathwada will also have to wait another fortnight to begin sugar production.
BB Thombre, chairman of West India Sugar Mills Association said, “As the organisations representing harvesting and transportation labour have demanded revision in their wages, sugar mills from Marathwada will not be able to begin crushing till the issue is resolved.”