Despite drought, Maharashtra sees record number of sugar mills apply for license

With all mills expected to face financial losses due to below capacity crushing, this high number of applications has surprised both the sugar commissionerate and the industry.

Estimates by the Maharashtra’s sugar commissioner have said that this season the state would have 921 lakh tonnes (Lt) of cane available for crushing.

This is far lesser than the 1,022 lakh tonnes available for the season of 2022-23 when 211 mills had operated for 121 days. With an increased number of mills the season might not extend for 100 days.

“Obviously increased number of mills would mean more strain on cane,” said a miller from Ahmednagar.

Solapur division which comprises the districts of Solapur and Dharashiv (Osmanabad) have seen 51 mills applying for crushing license.

Both these districts have reported lower than normal rainfall which has seen farmers diverting their cane for fodder.

The fate of the rabi season is uncertain given the low soil moisture. Mills in this area have already flagged concerns about cane availability in the season with some estimates talking about a 15 per cent diversion of cane already for fodder

The question of the viability of Maharashtra’s sugar industry is compounded by the increased crushing capacity of the mills last season.

The combined crushing capacity of mills in the state is 10.66 lakh tonnes of cane per day (TCD). Mills need to run for a minimum of 160 days to ensure they do not run into losses. Thus with 10.66 lakh TCD, the minimum cane requirement for a 160 days season would be 1,700 lakh tonnes of cane- which is almost double the amount of cane available this season.

Some of the millers who spoke to The Indian Express said one reason for an increased interest in the sugar sector is the bullish trend in sugar prices.

“Speculators might want to make a quick buck and thus have invested in running closed mills,” said a miller.  At present the ex mill price of sugar in Maharashtra is around Rs 3,700-3,740/quintal. Also ethanol and its fixed pricing by the central government has allowed mills to tap in an almost fixed source of income.

Another miller said with the Assembly and General Election next year, political interest in the sector has again increased. “Control of a sugar mill obviously gives an edge in the local politics- so many aspirants want to encash on the same,” others said.

But given the tight supply of cane, most mills would run into losses.