Bitter battle

Sanjeeb Mukherjee
Posted: Sunday, Nov 08, 2009 at 2121 hrs IST
Updated: Sunday, Nov 08, 2009 at 2121 hrs IST

Font Size

Print

Feedback

Email

Discuss

Related Articles

Import of fodder seeds likely: PawarPolicy vacuum, supplies behind vegetable inflationIndia deposits rice, wheat seeds in Svalbard Vault

: At the annual Economic Editor’s conference, Union Food and Agriculture Minister Sharad Pawar was in a tight spot owing to the looming sugar crisis in the country.

Pawar indeed has reasons to be worried, as the multi-crore sugar industry is perhaps passing through one of its most difficult times. Two successive years of low production, coupled with spiraling prices has put the entire industry into a tangle. To add to the woes, pricing of sugarcane has now turned into a war of attrition between the centre and the states.

And in spotlight is Uttar Pradesh, the country’s second largest sugar producer and more importantly home to some of the largest private millers, such as Bajaj Hindustan, Balrampur Chini Mills and Dhampur Sugar.

The genesis of the current imbroglio lies in this year’s sugarcane production. Due to the drought in the early part of the sowing season and general apathy of growers stemming from higher remunerative price from other crops, cane production shrunk by more than 1,00,000 hectares, leading to an estimated fall in cane output by around 25%. The sugar crisis has been further aggravated as carryover stocks from last year, which has slumped to just around 2.2 million tonnes (MT) as against more than 4 MT last year. This is largely due to poor sugar production in 2009-10, where output dropped to less than 15 MT, while consumption remained largely stable. In UP, sugar production this year is estimated at 8 to 10 MT, almost 2-3 MT less than last year. That’s largely because cane output is projected at around 90 MT, down from last year’s actual production of 117 MT. Because of the low sugarcane, none of the sugar mills in the state can run on 100% capacity. In Maharashtra — which, together with UP, contributes more than 80% of total sugar in India — the situation is only marginally different, where late rains in the month of August seem to have had a positive impact on sugar output. According to estimates, sugar production in 2009-10 is expected to be around 4.8 MT, up from an earlier estimate of 4.3 MT as rains have boosted the overall output and sucrose content of the standing sugarcane. Around 46 MT of sugarcane will be available for crushing this year, as against 40 MT last year. But, Maharashtra’s, good output, largely contributed by cooperative millers won’t be enough...

More from Focus