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Unsold molasses to delay sugarcane crushing season in UP

The sugar millers are saddled with huge unsold molasses inventory

Virendra Singh Rawat  |  Lucknow 

Sugar mills

The unsold stock with the private sugar millers has put a spanner in the plans of an early start of the crushing season from October 15.

However due to state policy framework, the sugar millers are saddled with huge unsold inventory, which has the potential of delaying the crushing season and pare it to the previous years.

The private millers under the aegis of UP Sugar Mills Association (UPSMA) have urged the state excise commissioner to facilitate early disposal of the stock.

The millers claimed allocation for country liquor manufacturers was higher than the actual requirement by the segment, while some state distilleries were either closed or running at reduced capacity following action by the National Green Tribunal (NGT).

Besides, owing to the 60 day window given to the country liquor manufacturers to lift their allotted stock, the millers alleged, most of them lifted the stock towards the end of the deadline.

The tanks at mills’ premises have to be emptied before the successive cane crushing season kicks off, since of two seasons cannot be blended.

In this backdrop, the has petitioned the state government for relaxing the “stringent policy restrictions” to enable mills complete overdue maintenance of the pipeline and storage tanks for the next season at the earliest.

Besides, millers want the government to treat allotted to the country liquor manufacturers but not lifted as sold, so that the units could sell it in the open market to clear inventory.

Meanwhile, a high level Indian Sugar Mills Association (ISMA) team is slated to meet UP chief minister Yogi Adityanath this evening to discuss issues related to the state sugar sector, which supports 5 million farmers’ households and accounts for direct economy of about Rs 35,000 crore.

Meanwhile, the UP arrears for the last crushing season stand at about Rs 1,500 crore, of which Rs 200 is pending on cooperative mills while the bulk of Rs 1,300 crore is due on private mills.

Settlement of cane arrears within 14 days of sale to mills was a prominent pre-poll promise of the Bharatiya Janata Party (BJP) in run up to the 2017 election. Soon after assuming office, Yogi had sternly warned private millers to ensure payment within the stipulated duration.

The erring mills had been served notices and warned of prospective issuance of the recovery certificates (RC) if they failed to comply. RCs authorise the district cane officer seize unsold stocks and other assets of defaulting mill for auction to settle farmers’ payments.

In the last crushing season, UP topped domestic sugar production by clocking record output at 8.75 million tonnes (MT) compared to 6.82 MT last year, thus clocking 40 percent higher production.

There are 116 sugar mills in UP, of which 91 belong to private sector, followed by cooperative sector at 24, while UP State Sugar Corporation Limited (UPSSCL) accounts for a single mill.

First Published: Wed, September 06 2017. 14:19 IST