New Delhi: Co-operative sugar mills in Maharashtra are now ready to process imported raw sugar for others on contract to utilise huge idle capacity as financial constraints obstructed their own overseas buying plan.
The move came amid apprehensions that massive crushing capacity may remain unutilised in the 2009-10 season.
“In the 2008-09 season, ending this month, co-operatives crushed 40 million tonnes of sugarcane against the capacity of 75 million tonnes. Even in 2009-10, 41 million tonnes may be crushed,” Maharashtra State Co-operative Sugar Factories Federation managing director Prakash Naiknavare told PTI.
The concern about idle capacity increased after co-operatives in the state failed to import any sugar due to lack of finance.
According to the model suggested by the federation, such co-operatives would process the raw sugar imported by mills/traders and return 85% of the quantity in the form of white sugar while keeping the rest with them, Naiknavare said.
“No money would be charged for refining. Co-operatives would gain by selling extra sugar after returning refined sugar,” he said, adding that two co-operatives have already entered into such arrangement with some mills.
Asked how much of sugar is likely to be processed under this model, he said only about two lakh tonnes are expected, as assembly polls in Maharashtra, due on 13 October, are clashing with the cane crushing season.
The crushing of cane is expected to start after Diwali in October and would continue till February-end.
Last week, agriculture minister Sharad Pawar said the country had imported 24 lakh tonnes of raw sugar and contracts had been “almost finalised” for the purchase of another 26 lakh tonnes.
The government has decided to allow millers to import duty-free raw sugar till December 2010 for sale in the domestic market, as drought has put pressure on output raising fears of a surge in prices of the sweetener to over Rs40 a kg.