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Rising sugarcane prices and stagnant sugar prices are crushing sugar mills, which need to increase efficiency and yield for viability, according to A. Vellayan, Executive Chairman, Murugappa Group.
Despite being decontrolled, government policies rather than economic considerations influence sugarcane and sugar prices. Only the lowest cost producer is profitable, he said.
“Whatever we do in the factory, the battle is won or lost in the farm,” he said referring to the need to increase sugarcane yield and sugar recovery, addressing the annual meeting of the South Indian Sugarcane and Sugar Technologists Association.
India produces 66 tonnes of sugarcane per hectare against more than 75 tonnes in Brazil and Australia. Sugar mills also need to better exploit alcohol, cogeneration and organic manure; look at value added products in sugar.
The Association felicitated Padma Shree Award winner Rajshree Pathy, Chairperson and Managing Director, Rajshree Sugars.
Pathy said the Government of India recognition for her contribution to trade and industry also throws light on the sugar industry, which is going through a difficult time. Technology will come to the fore in the coming year as sugarcane prices increase even as product price stagnates.
M. Manickam, President, South Indian Sugar Mills Association – Tamil Nadu, said it was regrettable that the Rangarajan Committee’s suggestions on sugar industry reforms had been implemented without the key feature of linking sugar and sugarcane price.
The political leaders continue to push up sugarcane price even as they keep sugar prices low for populist reasons. Farmers can benefit only if the sugarcane prices are commensurate with sugar prices.
R.V. Tyagarajan, Chairman and Managing Director, Thiru Arooran Sugars, said the sugarcane and sugar price mismatch has put the industry in a tough position. Sugar mills need to look at higher realisation for byproducts including electricity tariff from cogeneration and ethanol.
Palani G Periasamy, Executive Chairman, Dharani Sugars and Chemicals, said sugarcane prices have increased by 14 per cent while sugar prices by 3 per cent in recent years. Government policies are a stumbling block to fully tapping the potential of distilleries and cogeneration plants linked to sugar mills. The ethanol-blended fuel programme is a nonstarter.
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