UP sugar output touches 5.6 million tonne mark

The Uttar Pradesh sugar output in the current 2014-15 crushing season has exceeded 5.60 million tonne (mt), 10 per cent more than the corresponding figure of about 5.1 mt last season.

Currently, 101 units of the 118 state sugar mills are crushing sugarcane, while the rest had wrapped up their season.

According to Indian Sugar Mills Association (ISMA), sugar mills in India had collectively produced 22.2 mt of sugar so far. This is 2.8 mt higher than the production of 19.4 mt during the corresponding period last year.

About 476 sugar mills are under operation across the various cane-producing states in the country. While, 43 mills had already closed operations, including 17 in Uttar Pradesh, seven in Maharashtra and 11 in Andhra Pradesh and Telangana.

The Uttar Pradesh mills had crushed nearly 60 mt of cane, with the recovery rate standing at 9.4 per cent. Recovery rate is the ratio of extracting sugar from cane crushing.

Historically, the cane recovery percentage in the state has been lower than other states, notably Maharashtra, since the latter's crop has higher moisture and juice content.

The cane arrears pertaining to the current season are also mounting. According to the latest available report, the state mills have arrears of about Rs 4,800 crore and counting.

Though the cane price in Uttar Pradesh stands at Rs 280 a quintal, the state government had relaxed the payment structure and the mills were allowed to pay upfront price of Rs 240 a quintal.

Most of the arrears are with the private sector, which makes up for 94 units in the state. The remaining 23 and one unit belong to the cooperative sector and Uttar Pradesh State Sugar Corporation Limited, respectively.

The private mills have also to settle arrears for 2013-14 crushing season. A case is listed to be heard in Allahabad High Court next week over the failure of the mills to pay arrears.

Uttar Pradesh is India's largest and second largest sugarcane and sugar producer, respectively. The state sugar sector is facing crisis of sorts with mills alleging high cane price juxtaposed to falling sugar prices, dumping of sugar produced in other states to the state, low sugar recovery and lack of incentives, among others.