As the 2015-16 season comes to an end this month, sugar production in Tamil Nadu continues to be poor, with output at a low of about 13 lakh tonnes (lt), less than half the installed production capacity.
According to industry figures, production in the current season is slightly higher than the 11.32 lt produced in 2014-15.
Adverse climatic conditions and water shortage have also contributed to the percentage of sugar recovery from cane ruling low. Recovery in the current season is 8.73 per cent (8.68 per cent) with total cane crushed at about 148 lt (130 lt).
Bleak prospects
The outlook for the 2016-17 season is not much better based on the sugarcane planting area and the registration of sugarcane with mills by farmers.
Low prices leading to lack of interest among farmers to expand the sugarcane area and inadequate irrigation have contributed to the sustained poor performance in recent years say sugar millers.
N Ramanathan, Managing Director, Ponni Sugars, said the increase in the current season has been modest as compared with the early expectations.
Farmers are unhappy with sugarcane pricing and low water availability has also contributed to the disappointing performance. The coming season, too, could be one of low production.
Stable prices
At less than 9 per cent, yields in Tamil Nadu are among the lowest, he said. However, stable sugar prices and some indication of buoyancy are the “only bright spots.” Sugar mills should be able to manage the committed cane payments of Fair and Remunerative Price plus transport costs (₹2,300 plus about ₹150) totalling about ₹2,450.
Sugar prices have strengthened to about ₹3,400 a quintal compared with less than ₹2,000 last August.
Industry sources pointed out that ex-factory the mills are just about breaking even. But the indications are that prices could be on an upswing given the overall scenario. The total cane area registered with private sector sugar mills is estimated at about 2.74 lakh acres, compared with 2.85 lakh acres in 2014-15.
Fresh cane planting is down at about 90,000 acres (1.10 lakh acres). The ratoon crop, the offshoot that comes up after the previous season’s cane is harvested, is at 1.84 lakh acres (1.74lakh acres), showing farmers’ lack of interest in planting a fresh crop.