UP sugar output dips as crushing season rounds off

So far, 111 of 118 sugar mills that were active in the crushing season this year have closed after cane supply dried up

Uttar Pradesh sugar output in the ongoing crushing season 2015-16 is likely to dip by a whisker compared to last year, even as the season is at the fag end.

Last year, UP sugar production had stood at about 69.60 lakh tonnes (LT) compared to 67.90 LT this year so far.

With only a handful of private mills operational, the crushing season is expected to wind up by month end.

"The UP sugar production this year is likely to be in the sniffing distance of last year's level. It could be 1.5 LT less than compared to 2014-15 season," , an industry source told Business Standard.

So far, 111 of the total 118 sugar mills, which had participated in the crushing season this year have closed after cane supply in their respective areas got exhausted.

UP sugar sector is dominated by private sector with 94 units, followed by cooperative mills (24) and a UP State Sugar Corporation Limited (UPSSCL) unit.

However, sugar recovery rate at 10.60 percent this year is better than last year's 9.54. Recovery refers to sugar produced per unit cane crushed.

"The recovery has been better due to several factors, including favourable weather conditions, which boosted sugar content in the cane crop. Besides, the farmers had cultivated a new variety, which also increased sugar formation," UP Sugar Mills Association (UPSMA) secretary Deepak Guptara said.

He claimed the new variety accounted for 40 percent of the total sugarcane production this year.

Meanwhile, UP mills carry farmers' dues of about Rs 3,656 crore. The private mills have the bulk of payment commitments at Rs 3,394 crore followed by the cooperative mills at Rs 262 crore. In the current season, consolidated payment commitments of almost Rs 17,922 crore have so far been raised.

Earlier, the Akhilesh Yadav government had decided not to hike the cane price for the current 2015-16 crushing season.

With State Advised Price (SAP) of Rs 280 per quintal for common variety of sugarcane, this was the fourth year running when same price was effective in UP, the country largest and second largest cane and sugar producer respectively.

The last time, when SAP was hiked was in 2012-13, when it was increased by 17 per cent to Rs 280 per quintal for common variety, which forms the bulk of the cash crop. For the subsequent crushing seasons 2013-14, 2014-15 and current 2015-16 seasons, the SAP had been retained.