26 February 2021, New Delhi, IN: Earlier this season, sugar millers in Maharashtra had started distress sales below the government declared Minimum Support Price (MSP) of Rs 3,100 per quintal.
As Maharashtra’s sugarcane crushing season enters its last leg, sugar production is expected to be 102 lakh tonnes, according to industry estimates, as against the 95 lakh tonnes estimate put forth by the sugar commissioner.
Bhairavnath B Thombare, president of West Indian Sugar Mills Association (WISMA), the umbrella body of private millers in the state, said they arrived at the 102 lakh tonnes figure after deliberation on Thursday. “Already, mills in Solapur have started closing and more mills will end their season in the days to come. We expect mills in Ahmednagar and Marathwada to end operations in March,” he said. Mills in Kolhapur, Pune, Satara and Sangli are expected to finish operation by end of April. Till date, the state has produced 82 lakh tonnes of sugar.
Thombare and other private millers had initially estimated 108 lakh tonnes of sugar production, which has now been revised to 102 lakh tonnes. “This is mainly due to lower than expected yield, especially in Solapur and Ahmednagar,” he said.
WISMA’s estimates, industry insiders have pointed out, are significantly higher than the estimates of the commissionerate. At least 12 lakh tonnes of sugar has been diverted towards production of ethanol with the state expected to produce 105 crore litres of the fuel additive.
Maharashtra’s production figures in the last few seasons have been a cause for concern as they invariably are on the higher side of estimates. Excess production has put supply side pressure on sugar sales with millers struggling to sell their stock. Incentivisation of exports has helped reduce inventory of mills.
Earlier this season, sugar millers in Maharashtra had started distress sales below the government declared Minimum Support Price (MSP) of Rs 3,100 per quintal. Thombare said that a 20 per cent reduction in production by Uttar Pradesh changed the sentiments of the market. “At present, we see demand coming back to markets at MSP,” he said.
Maharashtra’s sugar commissioner had issued notices to sugar mills warning them not to sell below the MSP. Till date, no mill has been identified or penalised for below MSP sales.