Maharashtra’s sugar season of 2016-17 has reached its final leg and is likely to end by March 12, top officials of the state sugar commissionerate said. Barely 19 of the 150 sugar mills that had participated in the cane crushing this season are still working and are likely to wind up operations by next week. As on date, nearly 131 mills have completed crushing and have processed some 367.39 tonne of cane to produce 411.56 lakh tonne of sugar at a recovery rate of 11.20%.
Officials said that the state may cross the 420-lakh-tonne mark as far as sugar production is concerned but is likely to miss the 432.8-lakh-tonne target estimated by the state. Last year this time, only 71 factories had completed crushing operations to crush 637.11 lakh tonne of cane to produce 703.70 lakh tonne sugar at an average recovery rate of 11.05%. According to Vipin Sharma, Maharashtra sugar commissioner, this season, which commenced on November 5, is likely to last for 125-130 days with 19 factories still crushing cane. The shortest season was in 2008-09 when the season barely lasted for 80 days.
Factories in the Marathwada region were the first to shut down and closed operations by January-end followed by mills in the Solapur region. Till today, 27 of the 40 factories have shut down operations in Kolhapur, and 46 of the 52 factories in the Pune region are closed. All the 23 factories in the Ahmednagar region, 17 in the Aurangabad region, 11 in the Nanded region and 3 factories in the Amravati region have finished operations, as per the latest report. Mills are shutting down fast due to the lack of cane availability. According to the commissioner, the cane arrear position for the season is R211 crore as on February 15 and some 24 factories have been called for hearings on March 3.
Most of the factories are making payments and clearing the dues should not be a major issue, he said. On the price position, he said that the wholesale prices are in the range of R36-37 per kg and retail prices are well below the R40-per-kg mark.
Senior officials said that a decision regarding imports is possible only after the country’s mills complete the crushing season and a stock review position is taken by the government. After the Maharashtra State Cooperative Sugar Factories Federation (MSCSFF), farmers’ organisations including the Consortium of Indian Farmers Association, Raghunathdada Patil-led Shetkari Sanghatana, and the Karnataka State Sugar Growers Association1 have opposed sugar imports. Credit rating agency Icra expects the domestic sugar prices to remain firm in the near term, given the deficit situation in the domestic and international markets. The agency, in its report, says that the moderate cane price increase seen for the current sugar year across most states, augurs well for profitability in the near-term. While the sugar production in SY2017 is expected to significantly fall short of what was anticipated earlier, an opening stock of 76 lakh tonne is likely to result in the overall sugar availability between 280-290 lakh tonne.
This is likely to be adequate to fulfill the domestic consumption of around 243 lakh tonne (marginally revised from the earlier estimate of around 250 lakh tonne owing to short-term demonetisation impact), leaving closing stocks of around 46 lakh tonne in SY2017, which would be sufficient to meet the requirement for over two months of domestic consumption. Expectations of a decline in output have been driving domestic sugar prices, which have increased from around R31,500 per tonne in March 2016 to R36,000 per tonne in October 2016. The prices showed a marginal dip following the demonetisation exercise to around R35,000-35,500 per tonne in November and December 2016.