Cane deadlock may lead to sugar shortage in Uttar Pradesh

The deadlock over the sugarcane issue may lead to acute shortage of sugar in Uttar Pradesh and put pressure on the commodity’s retail price.

The retail prices are ruling high around Rs 35 a kg at present, already double from last year’s level.

The annual consumption of sugar in the state stands at about 5 million tonnes, while the production this year is likely to be around 3.5 million tonnes, leaving a massive shortage of 1.5 million tonnes.

On October 23, the state government had announced Rs 25 hike in the State Advised Price (SAP) over last year, although the farmers were demanding a price of Rs 280 per quintal of cane.

SAP stands at Rs 165 per quintal for common variety, Rs 170 for early variety and Rs 162.50 for rejected variety. Almost 80 per cent of the sugarcane crop is of common variety.

The farmers are adamant not to supply sugarcane at this price level, while sugar mills want the SAP or Fair and Remunerative Price (FRP) level, announced by the Centre recently, of Rs 130 per quintal to rule.

The farmers have announced that the raw sugar imports by the millers would also be not allowed.

The crushing, which has already been delayed, is not likely to start anytime soon pending the resolution of this burning issue, which has the potential to create a law or order problems, especially in western Uttar Pradesh.

Over the last several years, the cane area and production has been on the decline over issues related to its price and delayed payments.

The cane area declined from 2.8 million hectares in 2007-08 to 1.79 million hectares in the current crushing season.

The cane availability also came down from 160 million tonnes in 2007-08 to 98 million tonnes this year.

Similarly, sugar production dropped below 4 million tonnes in 2008-09 compared with 7.3 million tonnes and 8.5 million tonnes in 2008 and 2007, respectively.

There are about 157 sugar mills in the state, of which 93, 28 and 33 operate in the private, cooperatives and sugar corporation sectors, respectively.