Crisis in sugar sector may deepen with drought ahead in Maharashtra
Sugar mills in Maharashtra are shutting early this season due to lower sugarcane supply, with over 85% of mills already closed. Production has dropped sharply amid erratic weather and weak recovery rates. Authorities warn that possible El Niño–driven drought could push farmers toward less water-intensive crops like millets and pulses.
With early closure of sugar cane crushing operations this season due to shortage of sugar cane, coupled with a drought-like situation predicted in coming kharif season, the problems for sugar industry are likely to multiple.
“If El Nino leads to drought in Maharashtra, government will have to take a decision to dissuade sugar cane cultivation as it is a high water intensive crop. Instead, agriculture research universities are being roped in to help farmers adopt crop diversification.
The emphasis will be on millets and pulses which are less water consuming crops, especially in drought conditions,” said an official.
The state agriculture department has been directed to start the pre-monsoon planning in advance to tackle the drought situation, especially in 14 distressed districts of Vidarbha and Marathwada region.
In the ongoing season, more than 85 percent of total 202 mills have closed the sugar cane crushing operations as their sugar cane supply was over. The cane crushing is open only in 28 sugar mills.
The report from Maharashtra Sugar Commissioner reveals, “At least 172 sugar mills have completed their sugar cane crushing in Maharashtra. These include 45 mills in Solapur, 40 mills in Kolhapur, 24 mills in Pune, 24 mills in Nanded, 18 mills in Chhatrapati Sambhajinagar, 20 mills in Ahilyanagar, and 1 mill in the Amravati region.” Whereas, during the same period last season, 103 mills had concluded the crushing.
A senior officer in the state cooperative section said, “Majority of sugar mills have concluded their crushing operations well in advance due to crisis. In some cases, there had been a shortage of sugar cane. The uncertainty about export of sugar due to ongoing West Asia crisis had compounded the problems.”
In the 2024-25 season, sugar production in state is 791.15 lakh quintals. There is a sharp decline from the 1,046.85 lakh quintals produced during the same period last season (2023-24).
Official data states, “As of March 18, state-wide mills have crushed 837.31 lakh tonnes of sugarcane, compared to 1,029.98 lakh tonnes during the same period last season. The state’s overall sugar recovery rate stands at 9.45%, lower than the 10.16% rate achieved at this time last season.”
Among other reasons cited for lower crushing is adverse impact on unseasonal rain on sugar cane cultivation. The lower cane production has affected the supply to sugar mills.
The state government is under pressure from sugar mills to provide subsidy to sustain the industry. The sugar mill owners who belong to all political parties mainly Congress, NCP and NCP (SP) requested both centre and state to address the long pending issue of enhancing MSP rates
According to a senior bureaucrat well versed with sugar sector, “The sugar industry for the first time finds itself in a Catch-22 situation. It is facing challenges both at international and domestic front.” The centre’s decision to disallow increase in sugar price, which is static at Rs 36 per kg, has adversely hit sugar mills. The mills, which made huge profit from exports, are reeling under uncertainty due to international crisis, especially in Gulf countries. Secondly, the centre is not conceding their demand for increasing the Minimum Support Price (MSP).
Earlier, opposition MLAs requested the state government to tackle the sugar industry problems. The issue also resonated in the ongoing budget session of the Assembly.
Last week, a senior Nationalist Congress Party (NCP) leader Dilip Walse Patil had pointed out, “The overall sugarcane production in the state this year has declined 15 per cent due to weather conditions leading to a low yield of sugarcane cane. As a result, the crushing season ended in less than 100 days.”
Patil, a former finance minister, said, “The early closure of mills has led to an estimated loss of around Rs 3,300 crore for the sugar industry. Whereas, Rs 4,315 crore in Fair and Remunerative Price (FRP) payments to farmers are still pending.”
Making an ardent plea to government to take a relook at the sector, he opined, “The cooperative sector should announce a revival package. Without government support, the industry will be badly hit.”
Farmer leader and president of Swabhiman Shetkari Sanghatana Raju Shetti believes centre’s intervention is necessary to help sugar sector. He said, “Lower MSP and higher production cost leads to mismatch, resulting in sugar mills incurring financial losses.”
The sugar sector is significant for rural economy as it not only brings income stability to farmers and profits to mills, but contributes up to Rs 8,000 crore annually to centre through taxes including GST.
The annual turnover of the sugar sector is estimated to be between Rs 50,000 crore and Rs 60,000 crore.
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Source : The Indian Express
