Maharashtra sugar output likely to dip amid drought; ethanol production may drop 30%

According to estimates by the Agriculture Department and an expert committee, sugarcane crushing in Maharashtra is expected to decline to around 900 lakh metric tonnes this season from approximately 1,045 lakh metric tonnes last season.

In Short

• Sugar production in Maharashtra to drop by nearly 10 lakh metric tonnes this season
• Sugarcane crushing expected to fall from 1,045 to 900 lakh metric tonnes
• Ethanol production projected to decline by around 30% amid policy limits

Maharashtra’s sugar production is expected to fall by nearly 10 lakh metric tonnes this season as irregular rainfall and drought-like conditions affect sugarcane output. Ethanol production is also projected to decline by around 30%, adding to the challenges faced by the state’s sugar industry.

Maharashtra Sugar Commissioner Dr Sanjay Kolte said sugar production is likely to remain between 89 lakh and 90 lakh metric tonnes this season, compared with 99 lakh metric tonnes recorded last year.

SUGARCANE CRUSHING LIKELY TO FALL

According to estimates by the Agriculture Department and an expert committee, sugarcane crushing in Maharashtra is expected to decline to around 900 lakh metric tonnes this season from approximately 1,045 lakh metric tonnes last season.

With less sugarcane available for crushing, the average crushing season is also likely to become shorter. It could fall to around 90 days from 104 days last year, affecting the operations and revenues of sugar mills across the state.

Last season, 210 sugar factories carried out crushing operations in Maharashtra. So far, 103 factories have received licences for the upcoming season, while the process of issuing licences to another 109 factories is under way.

ETHANOL PRODUCTION FACES CHALLENGES

Sugar mills in Maharashtra have invested crores of rupees in ethanol production facilities. The state’s total installed ethanol production capacity is estimated at around 296 crore litres.

However, actual production and sales depend on the availability of raw materials, central government policies and demand from oil marketing companies.

At the national level, ethanol demand from oil marketing companies is estimated at around 1,100 crore litres. Maharashtra accounts for approximately 100 crore to 120 crore litres of this demand.

Around 9% of sugar is diverted towards ethanol production every year. However, restrictions under the Centre’s current policy on ethanol procurement made from sugarcane juice, syrup and B-heavy molasses are expected to limit the options available to manufacturers.

As a result, mills may have to depend more on C-heavy molasses and grain-based ethanol production. Lower sugarcane availability and policy restrictions could put further pressure on ethanol producers and raise concerns about returns on investments made in distillery projects.

21 SUGAR MILLS OWE FARMERS RS 119 CRORE

Meanwhile, most sugar factories that operated last season have cleared their Fair and Remunerative Price (FRP) dues to sugarcane farmers.

Kolte said 99.71% of the 210 factories that operated last season had paid the FRP due to farmers. However, 21 factories still owe farmers a total of Rs 119 crore.

Around 12 to 13 of these factories have reached agreements with farmers to clear their outstanding payments by October 31. The remaining factories will face punitive action if they fail to settle their dues, the Sugar Commissioner said.

Kolte also said meetings had been held at the central and state government levels to discuss the demands raised during the protest led by Swabhimani Shetkari Sanghatana chief Raju Shetti in Kolhapur.

A decision on these demands will be taken at the government level, he added.

- Ends