As the festive season approaches, the increase in sugar prices has become a significant concern in India. Retail sugar prices have now reached approximately Rs 60 per kilogram, a stark contrast to the previous high of over Rs 70 per kilogram in various regions just days ago. This sharp increase in pricing has prompted the government to take urgent measures, which include permitting zero-duty imports of raw sugar and requesting that sugar mills in Maharashtra commence crushing operations 15 days earlier than usual.

The expectation behind initiating early crushing is to boost the supply of fresh sugar in the market sooner, which is anticipated to help stabilise prices. However, industry experts warn that this strategy could adversely affect sugar recovery rates and potentially lead to financial losses for both mills and farmers involved in the sugarcane production process.

Challenges of Early Sugarcane Harvesting

Maharashtra stands as India’s principal sugar-producing state, with major cultivation areas such as Solapur and Marathwada. Nevertheless, commencing large-scale sugarcane harvesting prior to October 25 poses significant challenges. Sanjay Bhosale, a former Sugar Commissioner of Maharashtra, has pointed out that much of the sugarcane is harvested manually. Many harvesting workers travel from states like Madhya Pradesh to Maharashtra specifically for the harvest and typically arrive after the major festivals Dussehra and Diwali.

This year, with Dussehra occurring on October 20 and Diwali in November, commencing harvesting by October 15 appears unlikely given the current logistics. Furthermore, sugar mills require a sufficient supply of sugarcane to initiate operations; a lack of adequate stock may hinder their ability to start crushing ahead of schedule.

Moreover, the issue of quality arises since sugarcane that is harvested too early may not yield the desired quantity of sugar. This factor must be taken into consideration as mills plan their production schedules.

Impact of Early Crushing on Sugar Recovery Rates

A critical concern surrounding the proposed early crushing is its potential impact on sugar recovery rates, which indicates the efficiency of sugar extraction from sugarcane. Bhosale has indicated that initiating crushing between October 15 and November 15 could lead to recovery rates dipping below the expected levels, potentially falling to as low as 7 to 7.5 per cent. In contrast, crushing that begins after November generally maintains recovery rates exceeding 8 per cent, with regions like Solapur achieving recovery rates as high as 8 to 11 per cent.

A decline in recovery rates, even by a few percentage points, could result in substantial financial setbacks for sugar mills. This raises critical questions regarding the rationale behind mills opting for earlier crushing at the expense of potential economic losses.

The repercussions of these decisions extend beyond the sugar mills, impacting farmers directly. Sugarcane requires adequate time for maturation, and premature harvesting could compromise both its quality and weight, which in turn could lessen the number of cane sets obtained from each stem. Hence, early collections could ultimately be disadvantageous financially for both farmers and production units.

Concerns Over Crop Productivity This Year

This season, Maharashtra faces additional challenges concerning sugarcane productivity, primarily due to insufficient rainfall in several areas. While total production numbers may not witness a drastic decline, per hectare productivity has shown signs of deterioration. If harvesting occurs before the crop has fully matured, the ramifications could further exacerbate existing issues.

The government’s expectation that increasing supply will lead to reduced sugar prices may not materialise effectively. Experts suggest that, even if mills are able to release more sugar into the market due to early crushing, this does not necessarily guarantee a comparable reduction in retail prices.

The coming weeks will clarify whether the strategy of early crushing is beneficial in managing sugar prices or if it will impose additional financial strain on all stakeholders involved in the sugar production ecosystem.

Long or Short, get news the way you like. No ads. No redirections. Download Newspin and Stay Alert, The CSR Journal Mobile app, for fast, crisp, clean updates!

App Store –  https://apps.apple.com/in/app/newspin/id6746449540 

Google Play Store – https://play.google.com/store/apps/details?id=com.inventifweb.newspin&pcampaignid=web_share