Sugar output in Punjab to plummet to 1.75 mn quintals

Owing to shortage in cane crop and lower crushing, sugar output in Punjab is all set to touch a historic low of 1.75 million quintals in the current crushing season as compared with 2.5 million quintals during the corresponding period last year. According to the state government, the output would be the lowest in the state’s history after 1980-81.

Experts are of the view, with farmers shifting their preference towards wheat and paddy, the consistent fall in area under cane cultivation has badly affected the sugarcane production in the state, thus reducing the output. It is worth mentioning that the total area under sugarcane fell to 63,000 hectares in 2009-10 as compared with 81,000 hectares in 2008-09.

Speaking to Business Standard, Cane Commissioner M S Sandhu said, “This crushing season we are expecting sugar output to touch 1.75 million quintals against 2.5 million quintals last year.”

Due to shortage of cane, all the 9 co-operative sugar mills in the state have been closed. Their average crushing per day has been reduced to 42-46 days this crushing season against 61 days in the last crushing season.

Even the picture of the private sugar mills is not very rosy. Out of the 7 mills, only 5 are running as they are paying anywhere between Rs 240 and Rs 270 per quintal to growers. Besides the cooperative sugar mill, the state has 7 mills in private sector. The installed capacity of all the seven sugar mills in private sector is 31,000 TCD(tonnes crushed per day).

It is worth mentioning that the state has raised the SAP (of sugarcane) to Rs 180, Rs 175 and Rs 170 per quintal for advanced, medium and late varieties respectively for the crushing season of 2009-10, which is also on the higher side.

Also, the recovery rate from Punjab’s sugarcane is about 9.5 per cent while in southern India it is about 12-13 per cent, which is cause of concern for mill owners, which is also one of the reasons for the lower output.

Sources disclosed that the main reason behind fall in sugarcane area was shifting of farmers’ preference towards wheat and paddy crops in order to fetch better returns. Secondly, farmers got timely payment within a day or two from wheat and paddy unlike sugarcane, where in some cases payment was pending for more than a year. But this year, the farmers were paid on the spot and even in some cases advance were also given by the mill owners.

The low acreage of sugarcane has also forced the private entrepreneurs to think twice before expanding the crushing capacity as the low productivity would prove a stumbling block for the players who intend to increase the capacity to increase their bottom lines. Earlier, taking cognizance of consistent fall in area under cane, Ludhiana-based Abhishek Industries dropped its plan to set up sugar industry in the state.