Labour shortage, cold weather add to woes.
Sugar mills in Uttar Pradesh (UP), country’s second-largest producer, are operating at 65-70 per cent capacity owing to shortage in sugarcane arrivals.
“Labour availability has been an issue for the last 8-10 days due to the cold weather. Consequently, cane harvesting has been affected and arrivals have been low. Most mills in districts like Muzaffarnagar, Saharanpur, Meerut, Bijnor, etc have been operating at a capacity ranging between 65 and 70 per cent,” said a UP-based miller. Usually, mills in the state operate at over 90 per cent of the capacity around this time of the season. The country’s top sugar companies — Bajaj Hindusthan, Balrampur Chini and Triveni Engineering — have their operations in the state.
Triveni Engineering’s 16,000 tonnes crushed daily (tcd) capacity Khatauli sugar plant in Muzaffarnagar, for instance, crushed around 9,000 tonnes of sugarcane on Tuesday. Similarly, Bajaj’s 12,000 tcd Kinauni plant in Meerut crushed around 7,100 tonnes of cane on Tuesday.
The low operating capacity will add to the production cost of millers and also lead to a prolonged crushing season. “We need to incur fixed cost even if the operating capacity is low. A prolonged crushing due to delayed arrival adds to our overall production cost,” said another sugar miller. Industry officials, however, anticipate the situation to get better with improvement in weather.
To crush more as gur demand weakens
The state gur producers have been lacking in action in the current season. Gujarat and Madhya Pradesh, the two states, that were major market for the UP gur, have seen a revival in gur production. “The enthusiasm is low among gur producers as producers from Gujarat and MP are able to sell at lower rates since their production cost is low. Consequently, producers from Surat are now catering to Haryana which was a major market for UP gur. Similarly, MP is selling gur to eastern UP rather than buying from there,” said Arun Khandelwal, president, Federation of Gur Traders, Muzaffarnagar, Asia’s largest jaggery market. Khandelwal said the situation would cause a diversion of cane from gur units to sugar mills. Usually, gur producers see a diversion from mills since they make prompt cash payment unlike the mills who pay after two weeks.
