For the first time since their inception, the private sugar mills in Maharashtra would be registering losses in their operations.
Data from the sugar commissionerate shows that the private sugar factories have run into sugarcane dues worth more than Rs 381 crore.
This crushing season saw all the 79 private sugar mills in operation in the state. While the cooperative factories had crushed 586.42 lakh metric tonnes of sugarcane, the private mills had crushed 340.24 lakh metric tonnes. The 123 cooperative factories had produced 67.23 lakh metric tonnes of sugar while the 79 private mills had produced 37.19 lakh metric tonnes of sugar in the current season. The average recovery of the private mills in the state stands at 10.93 per cent while that of cooperative factories stand at 11.46 per cent.
Surplus sugar and low price of the commodity in the international and national markets have been one of the major issues plaguing the industry this season. Officials at the sugar commissionerate said this season factories with recoveries between 9.50 per cent and 11.50 per cent would fare better than the rest.
Factories with lower than the mean recovery production of sugar would not be enough to tide over the prices while for factories with more than 11.50 per cent recovery higher production cost especially in terms of handling and transport would result in more losses.
Most of the private factories officers pointed out and officers pointed out would be adversely affected this season.
Six private factories have paid lesser than 50 per cent of the fair and remunerative price (FRP) to the farmers.
Since the de-regularisation of the sector in 1998, private factories have registered steady growth in the state. Many of the loss making cooperative mills were sold to the private factories.
BB Thombare, president of the Western India Sugar Mills Association (WISMA) said this would be the first instance when the private mills would be registering losses in the state.
“We have been affected by the global glut and low prices as the cooperative sector. We had tried to keep the losses at minimum but this year the balance sheets would be in red for most of us,” he said. Thombare who is also the chairman and managing director of Natural Sugar Mills the state’s first private mill, said the major issue facing the industry is that while the price of raw material is fixed the end product’s price is volatile.
“The revenue sharing model of 70:30 suggested by the Rangarajan Committee would have made sense for the industry instead of government fixing the FRP. The Commissioner of Agricultural Cost and Prices, this year has talked about setting up of a special fund to bridge the gap between FRP and the cane price realised in the 70:30 formula. We have repeatedly asked the government to adopt the same,” he said.