The government?s hesitation in removing cap on sugar exports may get delayed with the sugar industry expected to revise production figure downward to 25 million tonne in 2010-11 against 25.5 million projected at the beginning of the season, largely due to late rains in Uttar Pradesh, the second largest producing state of the sweetener in the country.

This despite the state recording a 15% rise in the total area under sugarcane cultivation in 2010-11 season. ?We certainly see ourselves bettering our last year’s figures of sugar production of 5.18 million tonne by producing close to 6 millon tonne, but that would still be far below the 7 million tonne estimated at the beginning of the season, chiefly because of late rains and low yield. The advantage of high acreage has been wiped out by these twin factors,? says an industry insider, adding that the only redeeming factor that may help achieve the 6 million tonne mark has been the high sugar recovery.

?While at this time last year we had a recovery of 8.93%, this year it is 9.1%, which has helped us produce 4.62 million tonne sugar as on February 28. Last year’s sugar production figures till this date were 4.09 million tonne,? said an official of the state’s cane department.

Talking to FE, ISMA president Narendra Murkumbi said the country’s sugar output is estimated to be 25 million tonne, as against 25.5 million tonne projected earlier. ?We are more or less on target and would touch 25 million tonne by the end of the season and are seriously looking forward to the government opening up exports. If that is not done soon, the mills will face a cash strapped situation and would start defaulting on cane payments as domestic prices are not enough to cover the cost of production,? he said.

The trimmed forecast has, in fact, prompted the Centre to do a rethink on whether to allow, delay or deny approval for unrestricted exports under the open general licence (OGL), especially in view of the fact that rising food prices have pressurized the government to go slow on the issue.

However, according to industry insiders as well as those closely associated with the cultivators, UP is unlikely to hit even the 6 million tonne figure. ?Latest figures already point to the fact that cane supplies have already started dwindling. On an average sugar factories in Uttar Pradesh are operating at around 70%-80% capacity already as supplies have gone down and we expect almost half of the 125 factories to close by the end of the month,? said a senior official of the cane department, adding that already 4 factories have closed due to non-availability of cane.

It may be mentioned that the highest trade body of sugarcane, the Indian Sugar Mills Association (ISMA) had lowered the sugar output at 25 million tonne from against 19 million tonne in the previous year.