TN sugarcane mills face low capacity utilization

29 Nov 2010 Evaluate

Sugar mills in Tamil Nadu are set to face a shortage of sugarcane for the 2010-11 as cane acreages continue to remain low. According to official estimates, sugar mills are expected to achieve about 60 per cent capacity utilisation with the estimated cane availability at about 158 lakh tonnes for the season. Sugar output is estimated at about 14.61 lakh tonnes. However, this is a notable increase over the last season, but still far from the peak of about 260 lakh tonnes crushed by the mills in 2007-08.

In 2009-10 season that has just concluded the mills crushed about 143 lakh tonnes with the sugar output at 12.70 lakh tonnes. Capacity utilisation in the last season was about 68 per cent. For the current season sugar recovery is expected to improve to about 9.25 per cent, but unseasonal rains are a concern in some areas. During the current season the capacity utilisation is lower despite improved availability of cane because installed capacity has gone up significantly in Tamil Nadu following a spurt in investments in capacity expansion by the private sector sugar mills.

There are 46 sugar mills in the State with 28 in the private sector and 18 in the cooperative and public sector. At least 43 mills will be in operation in the current season against 37 in 2009-10. One more private mill, of the Bannari Amman group, is expected to go on stream this season. As of now 15 mills, eight in the cooperative sector and seven in the private sector have commenced operations for the season. In December all the mills will be in production. With the State Government hiking the sugarcane price to Rs 2,000 a tonne including Rs 100 for transport.