Maharashtra's sugar output may touch an all-time-high 91.50 lakh tonnes (lt) during the 2010-11 season (October-September), even as the State Government is planning additional sops to enable mills to crush the entire cane lying in growers' fields.

The State Cabinet, it is learnt, is considering a proposal on Wednesday to grant mills a cane transport subsidy of Rs 3/tonne for every one-km distance. Currently, this subsidy – effective since March 16 – is available only on cane transported beyond 50 km.

What is being mooted now is to dispense with the minimum 50-km distance requirement. That means even if cane is sourced from a distance of 10 km, mills can claim a refund of Rs 30/tonne.

The other major sop being proposed is 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/tonne, with these rates rising to Rs 130/tonne for crushing during May 16-31, Rs 195/tonne during June 1-15 and Rs 260/tonne for beyond June 15.

“The idea is to incentivise processing of the entire 810 lt cane available, so that not a single tonne lies uncrushed in the fields. In the event, Maharashtra would produce a record 91.50 lt of sugar, taking an average recovery of 11.3 per cent,” a State Government official told Business Line .

He, however, added that this projection assumed no unseasonal rains or shortage of harvesting and transport labour, “which we cannot totally rule out during the summer months”. The State's maximum sugar production of 91 lt was achieved in the 2006-07 season (see Table).

In the current season, Maharashtra factories have paid an average Rs 2,100 for every tonne of cane delivered at their gate, which includes harvesting and transport charges of Rs 300.

Mills in the State had, as on Monday, 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 season, crushing amounted to just 590.53 lt, yielding 68.31 lt of sugar at 11.57 per cent recovery.

“This time, we have 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,” noted Mr Prakash Naiknavare, Managing Director, Maharashtra State Cooperative Sugar Factories' Federation.

Meanwhile, Uttar Pradesh – the country's No. 2 sugar maker – is estimated to have produced around 59 lt in the current season. “We have compiled data up to April 15, based on which 58.85 lt has been produced and with six factories still crushing. Since then, all mills have stopped operations and the total output is likely to have ended up at 59 lt,” said an industry spokesperson.

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