Sugar mills in Marathwada resort to layoffs

The bad monsoon last year has led to a drastic reduction in area under cane cultivation this year. The sugar commissioner and the Maharashtra State Cooperative Sugar Factories Federation have said there has been a 30 per cent dip in area under cane cultivation this year: around 8 lakh hectares compared to 11 hectares last year.

Marathwada, Solapur and Ahmednagar have reported the maximum dip, posing a challenge for the sugar sector. Consequently, the state’s sugar production is expected to be around 64 lakh tonnes against a record 107 lakh tonnes this year. To add to the problem, standing cane has been diverted for use as fodder for animals in drought-hit areas.

Cane paucity has put a major challenge before millers with may mills deciding not to start the crushing season.

Thombare, whose Natural Sugar and Allied Industries operates two mills, in Osmanabad and Yavatmal, said they will not be operating the Osmanabad unit this year. “We have already intimated the same to the farmers, workers and others,” he said.

Only a handful of mills in Aurangabad, Nanded, Parbhani, Latur, Beed and Osmanabad would be able to start operations, he said. Mills not in a position to start the crushing season have started intimating the same to farmers and workers.

Officials at the sugar commissioner’s office said the final figure of the number of mills that will start cane crushing is likely to be known by the first week of August. “The federation will take the final decision after talking to their members,” an official said.

Low uptake of sugar and low prices continue to haunt the sector and a possible dip in production has failed to boost prices. Record unsold inventory, mills say, has failed to lift prices. In order to help them, the sugar mills have asked for permission from the government to convert their old stock into ethanol. In a letter to Prime Minister Narendra Modi, Jaiprakash Dandegaonkar, president of the Maharashtra State Cooperative Sugar Factories Federation, has pointed out that this year the sugar sector is expected to see a reduction of 30-40 crore litres of ethanol due to the ongoing cane paucity. “If the mills are allowed to covert their old sugar stock into ethanol this production dip can be met,” he said. Maharashtra millers on an average produce 110 crore litres of ethanol per year.