Andhra to modernise sugar co-ops

The Andhra Pradesh government has decided to modernise four of the 11 cooperative sugar mills in the state.

While tenders for two projects - Chodavaram and Kovur mills -- would be called on an immediate basis, two others - Sri Venkateshwara and Thandava - would be taken up in the next phase, said sugar and cane commissioner K Lakshminarayana. Modernisation of Chodavaram and Kovur would cost about Rs 55 crore.

Post modernisation, the Chodavaram mill, which has a crushing capacity of 4,000 tonne cane per day (tcd), would add 400 tcd while its co-generation capacity would go up by 8.4 Mw from the present 6.15 Mw. On the other hand, the Kovur mill crushing capacity would remain at 2,500 tcd but the mill would initiate co-generation of 6.47 Mw, he told Business Standard.

Similarly, the capacity of Sri Venkateshwara and Thandava, now at 1,500 tcd and 1,600 tcd respectively, would increase to 2,500 tcd. The two units would add 7.05 Mw and 6.25 Mw.

The state currently has 24 private sugar mills and three joint venture units apart from the 11 cooperative units. The total crushing capacity of these units is 107,000 tcd with private units accounting for 79,300 tcd, JVs 8,500 tcd and cooperatives 19,200 tcd. The recovery of sugar from the cane in the state is around 10 per cent.

However, what is worrying the sugar industry is the rapid depletion of cane acreage in the state with farmers shifting to short-duration corps like rice and maize as they fetch better price. This year, it is estimated about 1.6 million tonne cane would be crushed during the ongoing season, as compared with 2 million tonne last year and 2.8 million tonne during 2006-07.

The crushing season began in November, one month behind schedule, and so far 24 mills have crushed 338,000 tonne crush (till December 10) and produced 187,000 quintal sugar. The remaining 14 units will start crushing in about ten days. Though the total sugar output is expected to drop to about 40 per cent due to decline in the cropping area, prices will remain more or less the same as inventories will be brought out to the market, the commissioner said.

According to NCS Sugars MD N Nageswara Rao, the rise in input costs for cane production and almost stagnant returns are forcing farmers to shift to other crops. The sector is also facing a labour shortage during the harvest season as most opt for the rural employment guarantee scheme. As a result, harvesting costs have gone up to Rs 400 per tonne as compared with Rs 150 before the employment scheme.