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04-May2011

Maharashtra State To Grant Sops To Sugar Mills

In a plan to incentivize processing of the entire 810LT available cane, the Maharashtra State Cabinet is planning to consider a proposal to grant sops for sugar mills a cane transport subsidy of Rs 3 per tonne for every one-km distance to enable mills to crush the entire cane lying in growers' fields. Currently, this subsidy -effective since March 16 which is available only on cane transported beyond 50 km. That means even if cane is sourced from a distance of 10 km, mills can claim a refund of Rs 30 per tonne.

The above proposal has considered to compensate mills for reduced sugar recovery rates on account of undertaking crushing during May and June. Any cane that is crushed during May 1-15 will be entitled to a subsidy of Rs 65 per tonne, with these rates rising to Rs 130 per tonne for crushing during May 16-31, Rs 195 per tonne during June 1-15 and Rs 260 per tonne for beyond June 15 2011.

If this happens, Maharashtra would produce a record 91.50 LT of sugar, taking an average recovery of 11.3%. Presently, Mills in the State had crushed 756.24 LT of cane and produced 85.66 LT of sugar at an average recovery of 11.33 per cent. During the corresponding period of the 2009-10 seasons, crushing amounted to just 590.53 LT, yielding 68.31 LT of sugar at 11.57% recovery. Meanwhile, this time the State had 163 mills undertaking crushing operations, of which 118 are still running. In 2009-10, by this time, 100 out of the 141 factories had already shut down.

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