UP sugarcane crushing drawing to close

80% of mills shut for season

Uttar Pradesh sugarcane crushing season is drawing to a close, with 80 per cent of the mills are already done with their crushing operations.

Of the total 118 sugar mills in UP, 94 have wrapped up their crushing operations and only 24 are functioning. Majority of the closed mills are based in eastern and central Uttar Pradesh.

So far, the mills have produced nearly seven million tonnes (mt) of sugar in the season, compared with under 6.5 mt during 2013-14. The mills have collectively crushed over 73 mt and the sugar recovery has improved to 9.54 per cent.

The private sector accounts for 94 units in Uttar Pradesh. The cooperative sector comprises 23 units, while one unit is owned by the Uttar Pradesh State Sugar Corporation Limited (UPSSCL).

The sugarcane arrears have breached Rs 10,000 crore for the season. Against the total dues of Rs 20,340 crore on mills, they have collectively paid a little over Rs 10,000 crore. This excludes interest payment of Rs 181 crore.

At the start of the season, the state had retained the cane price at Rs 280 a quintal while allowing mills to pay at Rs 240 a quintal upfront and deferring payment of the remaining Rs 40 a quintal to the end of season.

Even after upfront payment of Rs 240 a quintal is considered, the total dues amount to Rs 17,431 crore.

The private mills also have to clear arrears of Rs 171 crore for the last crushing season also, for which the high court here is already hearing a petition.

In its last hearing on April 21, the HC had directed the state cane commissioner to file a status report on 2014-15 crushing season and give mill-wise details of the quantum of cane crushed, sugar production, proceeds from sale and payment to farmers. The next date of hearing is fixed for May 19.

Earlier, the state government had directed the mills to clear their dues by May 5 lest strict action is taken against them.

The sugar industry blames falling sugar prices juxtaposed to higher cane price for the crisis. Industry also blames the glut in international sugar market for subdued export market.