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Sugarcane acreages are on an upswing in Tamil Nadu, indicating sugar mills can look forward to improved cane availability in the 2011-12 season as compared with that of the last season.
Industry figures indicate that sugar mills across the State are seeing a 20 per cent upswing in sugarcane registration with total acreages touching about 5.8 lakh acres against 4.8 lakh acres in the last season. This translates to about 23 lakh tonnes of sugar production, which is about 20 per cent higher than the current 2010-11 production of about 18 lakh tonnes estimated as of September.
The higher acreages achieved and the forecast of higher sugar production has evoked a mixed response from industry representatives. Sugarcane is reasserting its position as an option for farmers as compared with other competitive crops but high labour costs are a concern for the mills and the farmers. Also, any improvement in raw material availability is good news for the private sector sugar mills, which have expanded capacities in recent years have so far been facing a shortage of cane.
But with sugar output set to grow by about 10 per cent to 260 lakh tonnes in the domestic markets in 2011-12 sugar mill representatives are worried about sugar prices falling.
However, despite the anticipated increase, sugarcane levels in the coming season still do not match the peak levels of sugarcane crushed in 2006-07 when Tamil Nadu crushed about 258 lakh tonnes of cane to produce about 26 lakh tonnes of sugar.
The private sector mills then handled 186 lakh tonnes of cane. In 2010-11 private sector mills are set to crush about 145 lakh tonnes, well below peak levels. Seven new mills added since then, including Bannari Amman group's Madras Sugars, are starting in the current season.
As compared with the peak production, the sugar mills in the State have the capacity to handle over 320 lakh tonnes of cane. But even with the increased acreage in 2011-12 the sugarcane availability is still about 30 per cent short of what installed capacity. As of the current season, there are 26 private sector sugar mills and 18 in the cooperative and public sector in Tamil Nadu.
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