UP sugar output likely to touch 7 mt this season

State mills have produced nearly 6.8 mt so far

Helped by a marked improvement in the sugar recovery ratio, the Uttar Pradesh sugar output is inching towards the seven million tonnes (mt) in the ongoing 2014-15 crushing season.

So far, the state mills have produced nearly 6.79 mt of the sweetener, against the cumulative output of about 6.47 mt during the previous season.

Sugar recovery has improved to 9.53 per cent vis-à-vis last year’s ratio of 9.29 per cent. Recovery refers to sugar realisation per unit of cane crushed and higher ratio refers to higher sugar production.

Currently, about 50 sugar mills are still operational, while the rest have wrapped up their crushing season. Last year, only 42 mills were operational during the same period. In other words, 68 or 58 per cent of the total 118 sugar mills in the state are now closed after their cane area exhausted.

The mills stop crushing when cane crop in the area allocated to them during the respective crushing season gets exhausted. The crushing is expected to continue till end-April. The sugarcane arrears have also been rising and stand at about Rs 6,650 crore (including interest). Bulk of the cane dues are with the private mills, which account for 94 units of the total 118 units in the state. The cooperative sector account for 23 units, while one unit is owned by the Uttar Pradesh State Sugar Corporation Limited.

Uttar Pradesh Sugar Mills Association Secretary Deepak Guptara said the primary reason for the mounting arrears was the falling retail sugar prices against higher cane price.

Industry also blames the glut in the international sugar market for the subdued export markets. At the start of the crushing 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 for the end of season.