UP sugar production may fall short of 5.2 mt

The sugar production in Uttar Pradesh for the 2009-10 crushing season is likely to fall short of 5.2 million tonnes as earlier projected.

At present, only five mills are crushing, while the rest 123 have already closed in the absence of adequate cane supply. These five mills are likely to shut by the month end.

So far, about 56.5 million tonnes sugarcane have been crushed in the state, producing nearly 5.14 million tonnes of sugar with the recovery standing at 9.11 per cent.

Earlier, it was projected that the sugar production in UP could touch 5.2 million against the dismal production at 4 million tonnes during 2008-09 season.

This season, the UP cane production had dipped considerably to 98 million tonnes from 160 million tonnes in 2007-08. The cane acreage also declined from 2.8 million hectares in 2007-08 to 1.79 million hectares in the current crushing season.

However, due to better cane recovery and drawal (cane diverted to mills for crushing) following remunerative prices being paid to farmers, the sugar production this year has beaten all expectations. The drawal percentage has increased from 40 to almost 55 per cent.

During the start of the crushing season, farmers’ agitation demanding better payment and refusal to supply cane to farmers had threatened to affect the sugar production in the state.

Against the 2009-10 State Advised Price (SAP) of Rs 165-170 for common and early variety respectively, the mills had been paying hefty incentives taking the price to almost Rs 280-300/quintal in UP, although the prices have softened now as the season advances to the end.

The state government even banned ferrying of raw sugar to UP till the crushing season was on to ensure better prices to farmers. The ban was lifted in February, when the payment rates placated the agitating farmers. Meanwhile, the sugar millers have combined sugar dues of about Rs 1,500 crore, including the mandatory payment to be made within 14 days of producing cane from farmers.