Sugar output may rise on lower cane diversion:BL 241209
Mawana Sugars says kolhus unable to pay farmers higher price.

"…This time, although there are 25-30 per cent more kolhus, they are drawing much less cane and working
barely 8-10 hours against 24 hours last year."

Mawana Sugars Ltd (MSL) expects to crush 10 per cent more cane during the current 2009-10 season
(October-September) on the back of reduced diversion of raw material to makers of alternative sweeteners
such as gur and khandsari.
"Last season, we crushed only 23.4 lakh tonnes (lt) of sugarcane compared with 33.4 lt in 2007-08. Sugar
recovery, too, fell from 9.7 per cent to 8.93 per cent due to which we could produce only around 2.05 lt", said
Mr Sunil Kakria, Managing Director, MSL.
According to him, based on current trends, "we might crush about 10 per cent more cane this season, with
recovery also improving to 9.5 per cent." The company also plans to refine 25,000 tonnes of imported raw
sugar during the season, which will overall translate into increased output.
Mr Kakria based his expectation of higher crushing on reduced cane diversion to gur and khandsari units.
"Last season, the kolhus bought about half of the marketable cane in our reserved area, leaving only the
balance for us to crush. This time, although there are 25-30 per cent more kolhus, they are drawing much
less cane and working barely 8-10 hours against 24 hours last year," he told Business Line.
Unattractive prices
One reason for this, he felt, was that gur prices were currently not all that attractive. At the start of the
season, gur was being sold in the Muzaffarnagar and Hapur markets at Rs 1,200 a man of 40 kg, i.e. Rs 30
a kg. This was higher than the prevailing ex-factory price of Rs 28-29 for M-31 sugar.But today, wholesale
gur is trading at Rs 950-960 a man or Rs 24 a kg, having gone as low as Rs 850 a month back. On the other
hand, sugar has rallied to Rs 35 a kg. "At current gur prices, the kolhus are not in a position to pay cane
farmers as much as we are, given their much lower recovery levels. Therefore, more cane is coming to us,"
Mr Kakria pointed out.
Mills in west Uttar Pradesh (UP) are currently paying a cane price of Rs 210-215 a quintal. But this could
change with Uttam Sugar Mills announcing a price of Rs 220-225, which is more than even the Rs 215-220
being offered by mills in Uttaranchal. Either way, it would render the operations of kolhus unviable, unless
gur prices stage a revival.
Production
Mr Kakria estimated UP's sugar production this season at 45 lt, up from the 40.64 lt of 2008-09. "The crop
size may be lower this time, but that will be more than offset by higher recovery and cane drawal rates," he
added.MSL operates three factories in UP aggregate crushing capacity of 29,500 tonnes cane a day (tcd).
Of these, two - Mawana (13,000 tcd) and Nanglamal (6,000 tcd) - are in Meerut and the third, Titawi
(10,500 tcd), is in Muzaffarnagar district.