Bitter days for sugarcane farmers
It’s another case of problem of plenty. Sharp fall in the prices of sugar following higher production this year in the country.
By Kalpesh Damor, TNN |
VADODARA : It’s another case of problem of plenty. Sharp fall in the prices of sugar following higher production this year in the country, including Gujarat, has triggered fears among sugar industry players that many sugarcane farmers may switch over to other crops such as cotton, groundnut, banana or other cash crops to have higher returns.
Sugar millers in Gujarat also have reasons to believe that farmers may diversify to other crops. Elaborating on the issue Dilip Bhakta, chairman of Madhi Sugar Co-operative, says that this year, sugar prices have plummeted by Rs 600 per quintal to touch the level of Rs 1,250-1,300 per quintal as compared to Rs 1,850 to Rs 1,900 per quintal last year due to higher production this year. Sugar production in Gujarat increased to 13 to 13.50 lakh tonnes this year from around 12 to 12.5 lakh tonnes a year ago.
The situation will be somewhat similar next sugar year (October-September) too. Industry estimates that sugar production for the year 2008-09 is likely to be much higher than 280 lakh tonnes of sugar production registered in 2006-07. This is because next year will also have 118 lakh tonnes of carryforward stock of the current year. It may be mentioned here that consumption of sugar in the country is only 190 lakh tonnes.
Amid such a huge sugar supply, farmers might not be in a position to get higher prices in next fiscal as well. In such circumstances, there are chances that they may switch over to other crops like cotton, groundnut, banana and other cash crops,” he said.
Expressing similar views, Sayan Sugar Co-operative MD Mansinh Rathod says that around 15-20% farmers may dump sugarcane for other crops. For the past few years, sugar production has been increasing on the back of increased plantation.
Though farmers received higher prices last year, this year price realisation for farmers has witnessed a sharp decline.
According to HA Badi, MD of Gujarat State Federation of Co-operative Sugar Factories, sugarcane farmers’ diversification to other crops depends on what prices farmers get this year from sugar co-operatives of the state.
Sugar millers in Gujarat also have reasons to believe that farmers may diversify to other crops. Elaborating on the issue Dilip Bhakta, chairman of Madhi Sugar Co-operative, says that this year, sugar prices have plummeted by Rs 600 per quintal to touch the level of Rs 1,250-1,300 per quintal as compared to Rs 1,850 to Rs 1,900 per quintal last year due to higher production this year. Sugar production in Gujarat increased to 13 to 13.50 lakh tonnes this year from around 12 to 12.5 lakh tonnes a year ago.
The situation will be somewhat similar next sugar year (October-September) too. Industry estimates that sugar production for the year 2008-09 is likely to be much higher than 280 lakh tonnes of sugar production registered in 2006-07. This is because next year will also have 118 lakh tonnes of carryforward stock of the current year. It may be mentioned here that consumption of sugar in the country is only 190 lakh tonnes.
Amid such a huge sugar supply, farmers might not be in a position to get higher prices in next fiscal as well. In such circumstances, there are chances that they may switch over to other crops like cotton, groundnut, banana and other cash crops,” he said.
Expressing similar views, Sayan Sugar Co-operative MD Mansinh Rathod says that around 15-20% farmers may dump sugarcane for other crops. For the past few years, sugar production has been increasing on the back of increased plantation.
Though farmers received higher prices last year, this year price realisation for farmers has witnessed a sharp decline.
ADVERTISEMENT
Currently, uncertainty over next year’s prospects is looming large and some of the farmers may look for other crops to have better profitability. According to HA Badi, MD of Gujarat State Federation of Co-operative Sugar Factories, sugarcane farmers’ diversification to other crops depends on what prices farmers get this year from sugar co-operatives of the state.
Too busy to trade in stocks? Invest in Mutual Funds with ET Money!
Bookmark or read stories offline -
Download ET Markets APP
Download ET Markets APP
ADVERTISEMENT
