Hindrao Burungale is spoiled for choice. This farmer from Chikhali Masur village in Karad taluka of Satara district is being courted by multiple sugar mills for his 130-odd tonnes of standing ‘ratoon’ cane on four acres. Burungale has already sold 150 tonnes of his earlier harvested ‘adsali’ and ‘suru’ crop on 4.5 acres to the Sahyadri Cooperative Sugar Factory at Karad, of which he is a member. But now, there are other mills — including in Kolhapur, about 65 km from his village — offering him Rs 2,800-2,850 per tonne at the farmgate, as against Rs 2,670 paid by the cooperative. “I’m struggling to make up my mind,” he admits.
Burungale’s sought-after status has to do with the scarcity of sugarcane in Maharashtra after back-to-back droughts. In the 2014-15 season (October-September), mills in the state crushed 930.41 lakh tonnes (lt) of cane and produced 105.14 lt of sugar. These fell to 742.94 lt and 84.15 lt in 2015-16. For this season, the Indian Sugar Mills Association’s (ISMA) initial estimates on September 28 put Maharashtra’s sugar output at 62.7 lt. However, the state’s sugar commissioner Vipin Sharma, on October 5, projected total cane crushing at only 445 lt. That, at an average recovery of 11.3 per cent, would have produced 50.28 lt of sugar, the lowest since the 46.14 lt for 2008-09.
But even the latter numbers now seem optimistic, with only 150 mills taking up operations this season, compared to 176 in 2015-16. Even of the 150, 72 have already stopped crushing for want of cane. As on January 23, all mills together have crushed a mere 315.70 lt of cane and produced 34.39 lt sugar at 10.89 per cent average recovery. The factories still running are mostly in the main southern Maharashtra cane belt of Satara, Sangli and Kolhapur. Only these mills have enough cane to operate till mid-March.
Sanjeev Babar, managing director, Maharashtra State Cooperative Sugar Factories Federation, expects the final cane crushing to be 400-425 lt and sugar output at 45-48 lt, assuming a recovery range of 11.25-11.29 per cent. Narendra Murkumbi, managing director of Shree Renuka Sugars Ltd, which has two mills in Maharashtra, sees crushing numbers even lower, at 390-400 lt. At last season’s recovery of 11.3 per cent, sugar production may not cross 45 lt.
In Maharashtra, farmers plant sugarcane either as a 17-18 month ‘adsali’ (sown in July-August), 12-month ‘suru’ (January-February sowing) or 15-month ‘pre-seasonal’ (October-November) crop. These also yield ‘ratoons’ automatically sprouting from the root stubbles of the harvested plant-cane. The ratoon cane takes only 11 months to mature. In any sugar season, mills typically crush 60 per cent of cane as plant (adsali, suru or pre-seasonal) and the remaining 40 per cent from the ratoon crop.
But this time, it’s been different, as the droughts in 2014-15 and 2015-16 took a heavy toll on fresh plantings, whose effects are being felt in the current season. Roughly 60 per cent of cane being crushed by mills comprises the ratoons from the plant canes of 2014-15 and their yields are lower even in southern Maharashtra, courtesy the severe moisture stress experienced during February-June. The good southwest monsoon rains that followed would have only partially salvaged the situation.
“In our area, normal ratoon yields are 80-85 tonnes per hectare, which have fallen to 60-65 tonnes this year,” notes Madhavrao Ghatge, chairman of the Kolhapur-based Shri Gurudatt Sugars Ltd. Murkumbi believes yields may have gone up had crushing been allowed to start only from December 1, as the Maharashtra government had originally decided. The extra time in the field may have led to more mature cane with higher sucrose concentration. But pressure from farmers, who viewed it as depriving them of an opportunity to take an extra crop before the next kharif season, forced a rescinding of the decision and factories began crushing from November 5.
The vastly reduced cane availability has upset the calculation of millers. Ghatge had forecast his factory to crush 7 lt, but now doubts if he would manage to do even 6.5 lt. Balasaheb Patil, chairman of the Sahyadri cooperative mill, has similarly revised downwards his cane crushed estimate for the season from 12 lt to 10 lt. He is also concerned over private mills “poaching” on the cane grown by farmer-members of the cooperative, despite it declaring a first instalment price of Rs 2,670 per tonne that is higher than the government’s FRP (fair and remunerative price) of Rs 2,495. Shareholder-members are technically expected to offer cooperative mills the first right over their cane. “On paper, a grower’s membership can be suspended if he were to supply cane to other mills. But we hardly resort to such action,” says Patil.
Growers, of course, aren’t protesting. Excess production during the past few seasons had resulted in most mills paying just the official FRP — that too with considerable lag. But now, FRP is passé. Rajendra Yadav is sarpanch of Gulumb village in Satara’s Wai taluka. “We are members of the Kisan Veer Satara Cooperative Sugar Factory. This year, however, we have had mills even from Sangli and Kolhapur coming and luring us to supply to them. The last time we saw this was in 2008-09,” he points out, adding, “for once, the grower is the king among barons”.
While Maharashtra’s growers — at least those who have enough cane — are celebrating, so are their counterparts, and even more so mills, in Uttar Pradesh (UP). The latter is set to overtake Maharashtra to become India’s largest sugar producer in 2016-17, the first time since 2005-06. As on January 23, UP mills had crushed 406.92 lt cane and produced 40.32 lt sugar — more than Maharashtra’s.
Expectations are that UP’s sugar output may cross 80 lt this season, up from 68.55 lt in 2015-16. The increase is due to more area planted to new early-maturing higher sugar recovery-giving cane varieties (http://bit.ly/2j0hCy2), apart from less diversion to demonetisation-impacted gur and other desi sweetener makers.
But even 12 lt extra production from UP cannot compensate for a 40 lt decline in Maharashtra and another 20 lt in Karnataka. It opens the possibility of sugar output for 2016-17 dropping to around 205 lt from 252 lt in the previous season. ISMA, on Wednesday, revised downwards its all-India estimate for 2016-17 to 213 lt, from the 233.7 lt projection of September 28. With opening stocks of 77.5 lt, the total sugar availability for the season would be just above 290 lt. While that can meet the domestic consumption requirement of 250 lt, it will not leave the most comfortable closing stocks.
Not surprisingly, average ex-factory sugar prices in Maharashtra have climbed from about Rs 32 to Rs 36.50 per kg since December 1. And, with polls in UP on, it is unlikely that the BJP-led government at the Centre will reduce the import duty on sugar from the current 40 per cent — at least till March 8 when the last phase of voting ends.