Sugar exports to bring sweet returns for cane co-ops

Co-operative societies to pass on gains to member farmers

With the Centre lifting ban on sugar exports, cash registers at sugar co-operative societies in the country are set to ring louder. What's more, as a move for incentivising sugarcane cultivation, the societies are expected to pass on the returns by around Rs 200-500 per tonne of the crop production.

"The move was long awaited even as we expect a bumper crop this year. Allowing exports will surely benefit farmers as they will get additional remuneration for their crop. Being a co-operative society, the benefits would be passed on to farmers, something which the private millers may not do for their farmers," said Mansinh Patel, chairman, Gujarat State Federation of Co-op Sugar Factories Ltd.

Rise in demand had led to farmers have reaping better prices for sugarcane over past two years. The prices had peaked during 2009-10, following which the government banned sugar exports in a bid to bring down the prices.

"The ban was successful in crashing prices last year thereby deterring cane growers from cultivation. But a recent approval from the central government for sugar exports will witness a spurt in prices again. This may incentivise the cane growers," said Patel adding that the cultivation area under sugarcane would be around 2.5 lakh tonnes in Gujarat. Unlike other states, sugar production in Gujarat comes entirely through the cooperative sector. This year, sugar production in Gujarat is expected at around 1.32 million tonnes.

The cooperative societies in other states have also expressed their joy over the central government's decision. "Lifting of ban on sugar export is a welcome decision as it will improve price scenario in the country. The farmers are going to benefit from the decision. The farmers are paid roughly around Rs 1800-1900 per tonne, which may also exceed Rs 2000 per tonne," said a senior officer from Karnataka State Federation of Cooperative sugar factories. There are around 23 cooperative sugar mills in Karnataka of which 13 have been leased out.

The sugar cooperative sector is believed to control 54 per cent of the country's total sugar production.

Besides Gujarat and Karnataka, Maharashtra, Andhra Pradesh, Karnataka and Tamil Nadu are among the leading states having sugar cooperative sector.

As per industry estimates, country's sugar production is estimated at 24.5 million tonnes for the season 2011-12 (October-September) as against an estimated demand of around 22 million tonnes.

Last year the country had a carryover stock of five million tonnes, while this year it is expected to hover at around 5.5 million tonnes.