Sugar: Late repairs works of Sugar Mills delay production

Due to delay in the work of annual repairs in sugar production factories, the start of the new season's crushing has slipped forward for two weeks. The purpose of starting mills was to crush the agate varieties of sugarcane. Generally, sugarcane sales of aged varieties are done to the Jaggery and khandsari industries, till sugar mills are not operational at this time. The industry estimates that Jaggery and khandsari units purchase 15% of the total cane production in the country.

Due to delays in the repair work of the factories that occur every year, the new crushing season will be delayed by two weeks. Avinash Verma, Director General of the Indian Sugar Mills Federation (ISMA) said, "We estimate that the production in October will be 300,000 to 350,000 tonnes, which is much less than the 0.8 million tonnes given to the government. Now most mills have planned to start crushing in the fourth week of October, while they had planned to start crushing in the first week of October. In Maharashtra (second largest producer), the government has announced to start crushing from November 1^st. On the basis of the assurance of supply of 0.8 million tonnes of new sugar in October and remaining stock of 4.0 million tonnes, the central government sanctioned only 0.5 million tonnes of drought-affected western states and 300,000 tonnes of raw sugar for the southern states.

Now most of the Uttar Pradesh mills are planning to start crushing in the last week of October. They will not start crushing before Diwali due to the shortage of workers. The Uttar Pradesh government estimates that due to the good availability of sugarcane sugar production this season, the production of sugar will increase by 10 percent to 10 million tonnes, whereas in the entire country, Sugar year 2017-18, estimated to be 25.1 million tonnes of sugar.

Director of Dwarkesh Sugar Industries, BJ Maheshwari said, "We have planned to start the sugarcane crushing season after a few days after Diwali. By then the workers will return after Diwali holidays. Despite this delay, this will start crushing 7 to 10 days before the last year. "Sugar production during the last monsoon was 20.29 million tonnes in 2016-17, while consumption in the country is 23.5 million tonnes estimates.

Sanjeev Babar, Managing Director of Maharashtra State Association of cooperative sugar factories, said, "In Maharashtra, sugar mills were planning to start the new season from November 1^st.  The purpose of this delay was that there was no problem in harvesting sugarcane after the heavy rains in September. Sugarcane grows in October and November, so we do not want the farmers to harvest sugarcane without rooting and we get less sugar than sugarcane. Sugar production in Maharashtra this year is estimated to be 55% more than 7.4 million tonnes, which was 4.2 million tonnes last year.

Mills and producers fighting for sugarcane prices
Large growers started their operations in early September with the initial sugarcane. For this sugarcane, farmers get lesser value than the cane variety of mature variety. Therefore, crushing of this type of cane is non-profitable for sugar mills. Unlike normal operations, however, sugar mills have announced to start production of crushing in the beginning of October this year to increase production, which is at least two weeks before their normal time limit.

Federation of Jaggery Traders president Arun Khandelwal, who represents Jaggery grower and traders in Muzaffarnagar, Uttar Pradesh, said, "Sugar mills from the early start of the crushing season will be involved in pricing wars with jug maker units for this sugarcane purchase  have been there. Last year, the good prices of Jaggery made the crushers financially strong, so that they could easily cope with sugarcane prices paid by sugar mills. Because jaggery produces the quantity of purchase of sugarcane according to their needs, they decide early and there is no regulatory fear that helps them to change their strategy immediately.

Crushers buy sugarcane according to their needs and they sometimes even stock it in hopes of increasing prices. However, sugar mills on the contrary have to be forced to buy cane so that they have to face the fast and continuous flow of raw materials without worrying about price fluctuations. Unlike previous years, Jaggery growers are in a better position to pay higher prices to farmers for the purchase of sugarcane.

The interesting fact is that this time the profit is visible in the favor of jag farmers. With the new variety of sugarcane, the average yield is estimated to increase by 2-4% in entire India. Piyush Bansal, proprietor of Durgadas Narayan Das, one of India's largest Jaggery business companies in Hapur, Uttar Pradesh, said, "This is the reason why the Junk producers are entitled to the same price as the State Supported Price (SAP) set by the Uttar Pradesh Government for sugarcane. There will be no problem in repaying. The SAP is more than the fixed and cost-effective price set by the Center (FRP). ' The Uttar Pradesh government has yet to declare its SAP for sugarcane.

In order to counter the sugar mills, jag farmers have started publicity with sugarcane farmers on a steady and timely payment. Crushers have started operating rapidly to increase production. Crushers have increased their production capacity by 25% this year. The prices of Jaggery have so far recorded considerable fluctuations in this season. After reaching US$656 per mt almost two weeks ago, the new Jaggery of the new season is being sold at a price of US$523 per mt. in the wholesale market of Muzaffarnagar and Hapur.