Maharashtra sugar industry faces crisis from more mills: ‘Where will cane for all our factories come from?’

May 11, 2023
The Indian Express |

BALASAHEB PATIL is a worried man. The Sahyadri Sahakari Sakhar Karkhana (SSK) cooperative sugar mill, of which he is chairman, could crush just 9.11 lakh tonnes (lt) of cane in the just-ended 2022-23 season, as against 11.63 lt during 2021-22. The less cane crushed was due to lower per-hectare yields from extended southwest monsoon rains last year, besides private mills “poaching” the crop from the cooperative’s area of operations.

But Patil’s main concern isn’t the current season. Instead, it is about the future cane availability for his mill near Karad town in Satara. This district in western Maharashtra currently has 15 sugar mills with a combined crushing capacity of 38,480 tonnes of cane per day (tcd). That capacity is expected to go up to 70,980 tcd when the next 2023-24 season takes off from October, with the Sahyadri SSK alone expanding from 7,500 tcd to 11,000 tcd.

“Where will the cane for all our factories come from? It will be a dog-eat-dog situation where every mill will try to corner as much cane and poach into the others’ areas,” says Patil, who is also the NCP legislator from the Karad North Assembly constituency and a former Maharashtra minister of cooperation.

Sugar mills need to run for at least 150-160 days during the season in order to be viable. Maharashtra is, at present, witnessing mills going in for massive capacity expansions. The state had 200 operational mills with an aggregate crushing capacity of 801,300 tcd in 2021-22. These rose to 210 and 882,550 tcd, respectively, in the recent season. In the coming 2023-14 season, the crushing capacity of all mills is expected to further increase to 10.66 lakh tcd.

While the capacity additions may be viewed as a sign of revival of the sugar industry, not many millers themselves are convinced. If all mills with 10.66 lakh tcd capacity were to run for 160 days, the total cane requirement for the season would be over 1,700 lakh tonnes (lt). As against this, the 2022-23 season witnessed mills run for an average of 121 days and crush 1,053.17 lt of cane. Even in the previous season, which had an average duration of 173 days, they could crush just 1,373.60 lt.

“Increased crushing capacity without parallel increase in cane availability would do two things. The first is it will reduce the crushing season and capacity utilisation, causing financial losses to mills. Secondly, in their desperation to extend the season, they will crush even immature cane that hasn’t grown to its full duration and gives lower sugar recovery,” points out B B Thombare, chairman & managing director of Natural Sugar & Allied Industries Ltd, which has one mill each at Kallam (Osmanabad district) and Mahagaon (Yavatmal).

The extent of cane “poaching” is likely to be the most in western Maharashtra districts such as Sangli, Satara, Solapur and Pune. Solapur district alone has 37 mills that are struggling to get cane even with their existing aggregate crushing capacity of 153,000 tcd, expected to expand by another 10,000 tcd in the 2023-24 season. “We have been relatively lucky because of four consecutive above-normal monsoons. If the monsoon fails this time, it will add to our woes,” admits a miller.

No less worrying is the environmental consequences. The increased cane requirement for the expanded crushing capacities of mills can come only through increased yields or farmers planning more area under a water-guzzling crop. “The entire Marathwada region and neighbouring districts such as Solapur are already drought-prone. Higher cane acreage amid depleting water tables will pose a serious threat to food security, apart from having long-term environmental effects magnified by climate,” says Himanshu Thakkar, coordinator of the South Asia Network on Dams, Rivers and People.