UP begins cane area reservation

Written by Deepa Jainani | Lucknow | Updated: Sep 1 2010, 04:32am hrs
Against the backdrop of high sugar production expected during 2010-11 crop season that starts in October, the Uttar Pradesh government has started the process of reserving sugarcane area early this year.

The process, which usually starts from the third week of September, has begun in Lucknow from Monday and is expected to be completed by September 20 so that millers can start crushing early this year. Officially, the cane department has estimated that sugarcane area in the state will rise by 17.5% to 21.01 lakh hectares this year from 17.60 lakh hectares last year.

However, speaking to FE, a senior cane department official voiced apprehension over the euphoria over bumper sugar production in 2010-11 and said while the cane area has definitely increased by almost 18% from last year, another disturbing trend that will pull back the sector, especially in Uttar Pradesh is the fact that floods have devastated most cane growing districts in the Himalayan foothills such as Lakhimpur Kheri, Gonda, Bahraich, Balrampur, Srawasthi, Basti and Deoria.

While the area under cane cultivation has definitely grown bigger than last year, the drawal percentage of cane would fall as floods are likely to affect the crop. The average yield last year was 55 tonne/hectare, which may come down to between 50-54 lakh/hectare, depending on the extent of damage that the floods will wreck on the crop, said a cane department official, adding that floods will add further difficulties, as the recovery percentage could also be hit.

If this is the case, the availability of cane will be affected and hence the issue of cane shortage will once again trouble the industry, which had only last year, had a harrowing time in procuring cane to meet the increased milling capacities, which have been created over the last few years in UP. We are likely to see a repeat of last years scenario, when mills did their best to outdo each other in buying the maximum cane at a premium, said the official.

In fact, the fear of not getting enough cane to run their factories was so dominant that the millers ended up paying the farmers whatever price they were asking for the cane. In fact, the 2009-10 season saw price rise for cane sometimes on a weekly or fortnightly basis and the average price of sugarcane fluctuated between astronomical levels of Rs 250-280 a tonne. We are praying that the situation improves and we do not have to face last years situation, for it will be suicidal for us to pay higher prices back to back for two years. Our bottom-lines are yet to stabilise after last years experience, said a miller from eastern UP.