Maharashtra’s sugar production is anticipated to drop by nearly 10 lakh metric tonnes this season due to irregular rainfall and drought-like conditions impacting sugarcane yields. According to Maharashtra Sugar Commissioner Dr Sanjay Kolte, the expected sugar production will range between 89 lakh and 90 lakh metric tonnes, a significant decrease from the 99 lakh metric tonnes recorded in the previous year.

This decline in production is attributed to adverse weather conditions that have affected the overall sugarcane output across the state. The challenges posed by the drought are expected to have a ripple effect on the entire sugar industry, which is a crucial component of Maharashtra’s agricultural economy.

Reduction in Sugarcane Crushing

Estimates from the Agriculture Department and an expert committee indicate that sugarcane crushing in Maharashtra is likely to fall to approximately 900 lakh metric tonnes this season, down from around 1,045 lakh metric tonnes last year. This reduction in sugarcane availability is projected to shorten the average crushing season to about 90 days, compared to 104 days in the previous season.

The decrease in crushing days could significantly impact the operations and revenues of sugar mills throughout the state. Last season, 210 sugar factories were involved in crushing operations, but as of now, only 103 factories have received licences for the upcoming season, with an additional 109 factories still in the licensing process.

Challenges in Ethanol Production

Maharashtra’s sugar mills have made substantial investments in ethanol production facilities, with an estimated total installed capacity of around 296 crore litres. However, actual production and sales are contingent on the availability of raw materials, government policies, and demand from oil marketing companies.

Nationally, the demand for ethanol from oil marketing companies is estimated at approximately 1,100 crore litres, with Maharashtra contributing about 100 crore to 120 crore litres of this demand. Each year, around 9 per cent of sugar is diverted for ethanol production, but current policy restrictions on ethanol procurement from sugarcane juice, syrup, and B-heavy molasses may limit the options available to manufacturers.

This situation could compel mills to rely more on C-heavy molasses and grain-based ethanol production. The combination of limited sugarcane availability and policy restrictions may further strain ethanol producers and raise concerns regarding the returns on investments made in distillery projects.

Outstanding Payments to Farmers

In the context of financial dealings, most sugar factories that operated last season have settled their Fair and Remunerative Price (FRP) dues to sugarcane farmers. According to Kolte, 99.71 per cent of the 210 factories have cleared their FRP obligations. However, 21 factories still owe a total of Rs 119 crore to farmers.

Approximately 12 to 13 of these factories have reached agreements with farmers to resolve their outstanding payments by October 31. The remaining factories face potential punitive actions if they do not settle their dues, as indicated by the Sugar Commissioner.

Furthermore, discussions have been held at both central and state government levels regarding the demands raised during a protest led by Swabhimani Shetkari Sanghatana chief Raju Shetti in Kolhapur. A decision on these demands is expected to be made at the government level in the near future.

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