UP sugar to sour, production to dip 30% in 2008-09

Sugar output in Uttar Pradesh is likely to dip almost 30 per cent during the 2008-09 crushing season following low cane production and under-recovery of sugar.

The sugar recovery is down to 8.75 per cent from 9.39 per cent last year due to the damage caused by floods and the heavy rainfall last year.

“Besides, the winters have arrived late this year, which has also adversely affected the sugar recovery this time,” cane department official A K Sinha told Business Standard.

Against last year’s figures of about 7.4 million tonnes, this year the sugar production is likely to be around 5.2 million tonnes, a drop of 30 per cent, an official of a prominent sugar producer said.

However, the state cane department is more optimistic of the sugar production figures and pegs the output at 6.2 million tonnes.

Cane production is down about 30 per cent this year against 110 million tonnes due to the fall in acreage at 2.1 million hectares. Sugarcane farmers have turned to other crops from last year, as they are able to rotate more crops and there is a certainty in payments.

The crushing, which started in November last year, is on and due to lower availability of cane, is likely to finish by February 2009. So far, almost 20 million tonnes of sugarcane have been crushed, producing roughly 1.7 million tonnes of sugar.

The sugar industry feels the producers would not be able to reap the benefits of low sugar production and better prices.

“The centre is talking of sugar imports while the margins of UP sugar producers are already under strain at a cane price of Rs 140 per quintal. Besides, in this election year, the government will not allow sugar prices to rule high,” a Balrampur Chini official said.

Meanwhile, the cane payment situation is up-to-date this season and sugar mills have made a total payment, including advance, of Rs 1,814 crore to farmers against the total due of Rs 1,692 crore, according to official figures.

For the 2008-09 crushing season, the state government has announced a State Advised Price (SAP) of Rs 137.50 per quintal of cane for the rejected variety, Rs 140 for general variety (up from Rs 125 from last year) and Rs 145 for early variety.