Sugar production likely to drop by 60 per cent

Sugar production in the state is likely to drop by 40 to 60 per cent owing to the acute water crisis last year, increasing chances of hike in sugar prices during the festive season. However, the Maharashtra State Cooperative Sugar Factories Federation said that prices could be controlled if the Centre and state governments take the right decision.

The board of directors of the federation met on Wednesday at Sakhar Bhavan at Nariman Point. Federation chairman Shivajirao Nagawade, who chaired the meeting, said that though the state had recorded sugar production of 84.01 lakh metric tonnes (mt) in the 2015-16 crushing season, this was 20 per cent less than the previous year.

“Three consecutive years of drought and the water crisis have badly affected production of sugarcane, and ultimately production of sugar declined by 68 per cent in 15 districts across the state,” said Mr Nagawade.

The average reduction of sugar production is around 40 per cent, he added. At the national level, sugar stock of 91,00,000mt was available at the beginning of the 2015-16 crushing year. During this season, 513 sugar mills produced 249,00,000mt sugar. India consumes 255,00,000mt sugar and 16.46 lakh mt sugar was exported. In this way, as on October 1 this year, a surplus of 68.54 lakh mt of sugar stock will be available.

When asked whether the sugar price would shoot up in the festive season, Dilip Walse-Patil, director of the federation, said, it depends on the international market and the policy adopted by the Centre and the state government.

Mr Patil said that 134 sugar mills in the state had taken Rs 327 crore in loans from various financial institutions and they already owe them approximately Rs 1,000 crore. It is not possible to repay this from income on sugar sales as the price of sugar has been set at Rs 3,300 per quintal, which is not viable for sugar mills. “The difference between production cost and the selling price is huge and this is reflected in balance sheet of the sugar mills. We have demanded that the Centre bring about a firm policy about export of sugar, loans should be restructured to provide relief at least for next year and sugar imports must be restricted to boost the domestic market,” said Mr Patil.