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State government ups production figures, Centre brings stock limits for mills

Asked whether mills will now overturn their decision to downscale the first installment payment, Thombare said mills will do that once ex-mill prices cross the Rs 3,200 per tonne mark.

Written by Partha Sarathi Biswas | Pune | Published: February 9, 2018 4:54 am

Increased yield has led Maharashtra to revise its earlier estimates of sugar production halfway into the sugarcane crushing season. According to new estimates by the cane commissionerate, the state produces at least 90 lakh tonnes (lt) of sugar compared to the earlier estimates of 73 lt of sugar. Officers in the sugar commissionerate as well millers say yield per hectare of cane has seen an upward trend, which has led them to revise the production estimates.

The state is reporting yields of 110-150 tonnes of cane per hectare yield as against the normal 80-100 tonnes. Heavy rain during the month of October, millers say, has increased the per hectare yield, which has led to more cane being available for crushing. Even mills in Marathwada, who usually start winding up by the end of February, now say some of them will continue their operations till the end of March in tandem with majority of the mills in Western Maharashtra. Only a handful of mills in Sangli and Kolhapur might continue their crushing on some days in April. This increased sugar production, millers say, will just increase their problems of paying the fair and remunerative price (FRP) to growers.

Sugar prices have been on a downward spiral, which led millers to revise their first installment payments to farmers. Maharashtra had reported over Rs 2,600 crore as cane arrears as mills had defaulted on their payments. On Thursday, the central government took the second step to spike up the prices by limiting the sugar sales of the mills. By the end of February, mills will have to hold 83 per cent of their January-end stock and by the end of March, they should hold 86 per cent of their end of February stock.

Welcoming this move, Prakash Naiknavare, managing director of the National Federation of Cooperative Sugar Factories, said this was the right decision at the right time. BB Thombare, chairman and managing director of the Latur-based Natural Sugar and Allied Industries, said this move will firm up the prices of sugar. Asked whether mills will now overturn their decision to downscale the first installment payment, Thombare said mills will do that once ex-mill prices cross the Rs 3,200 per tonne mark.

Mukesh Kuvadia, secretary of the Bombay Sugar Merchant’s association, said the present restrictions have increased the sugar prices by Rs 150 per tonne. “We feel the prices will cross the Rs 3,200 per tonne mark as soon as the release mechanism kicks in,” he said.

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