Sugar Mills In Tough Times As Due Rises To Rs.12,000 Crore

Despite the mounting arrears of the sugarcane farmers there is no let up in increase in area under sugarcane cultivation for the next cane crushing season 2018-19. The sugar mills are yet to clear over Rs 12,000 crore outstanding dues of the recently concluded cane crushing season 2017-17. The next season 2018-19 is likely to commence from November next.

Faced with record sugar production of 1.2 Crore MT and mounting arrears the private sugar mills had issued appeal to the sugarcane farmers to stop sowing cane or at least bring down the area under cane so as to prevent the glut in sugarcane production and the sugar during the next season 2018-19. The sugar industry had also curtailed investing in cane development where they provide cane seed, insecticide and other agriculture inputs on credit or at subsidised rates to cane growers. The industry invests in cane reserve area within a 16 sq km radius of the mill allotted to it by Cane department every year from where it gets cane supply during crushing season.

Even in the face of record outstanding and glut, the area under sugarcane cultivation during the previous 2017-18 season increased by 2.5 lakh hectares to 23 Lakh hectares is likely to increase by over One lakh hectares for the next season. The Cane farming is considered more lucrative than other crops. Its area had been on a rising trajectory over the past almost 5 years.

To deter the farmers from sowing sugarcane the private sugar mills had stayed away from the process of cane survey conducted by the cane department to ascertain the area under the cane cultivation. The survey was conducted by the cane cooperative societies and the officials of the cane department. The rise in area under cane cultivation had led to increase in sugarcane production forcing the mills to continue the cane crushing till May this year. With the rise in area for next season the mills will have to continue cruising beyond April next year.

“The next cane crushing season 2018-19 is set to be challenging for us as 2019 Lok Sabha elections are also scheduled to be held in the midst of the season so our aim is to ensure maximum procurement of the sugarcane by the sugar mills to avoid discontent among the farmers,” said an official of the cane department.

The cane department sources said to facilitate the crushing of maximum quantity of sugarcane by the sugar mills during 2018-19, the state government wants the crushing season to commence in the second week of October. The cane department has initiated the process of the cane reservation for the next season 2018-18 and has directed the sugar mills and cane cooperative societies to submit their indent for the sugarcane at the earliest.

Against annual consumption of 2.30 crore MT sugar in India, production during this season is expected to be 3.25 crore MT. Sugar production in UP was 80 Lakh MT in last season which was likely to increase by 30 percent to 1.12 crore MT in 2017-18.

Glut caused by excess production has dented capacity of sugar mills to clear cane arrears which have crossed the Rs 12,000 crore mark. Sugar refinery officials said that against cost of production of Rs 3, 7000 for one quintal, the ruling open market price was hovering around Rs 2,600-2,650 per quintal.

Incentives announced by Union government for promoting export to clear excess stock have not helped as price of sugar in international market have also crashed to Rs 2,200 per quintal.

SOURCEDaily Pioneer


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