The sugar industry in Uttar Pradesh, which is poised to be the largest sugar producing state in the country for the second consecutive year, is caught in a fix even before the start of the crushing season.
The sugar industry in Uttar Pradesh, which is poised to be the largest sugar producing state in the country for the second consecutive year, is caught in a fix even before the start of the crushing season. Along with a bumper sugar production that is likely to cross the 100 lakh-tonne figure in the coming season, the 116 sugar mills in UP are looking at a bumper production of molasses. From 393 lakh quintals this year, the figure is likely to be close to 500 lakh quintals. While this should be good news for the sugar mills in the private as well as cooperative sector, as they can earn extra from the sale of molasses, both to the country liquor lobby as well as in the open market, the issue is more of a problem as of now because of the mills’ inability to offload the existing molasses stock of this year. Due to this, they will not be allowed to start crush cane in the next season.
“There is a lot of pressure on us to start the new sugar season in October itself in order to tide over any situation of shortage. But, according to norms, sugar mills in UP can start crushing sugarcane in a new season only when they dispose off the old molasses stock as existing laws prohibit that molasses are mixed for two seasons or more. “Even if a litre of the old molasses stock is retained in the tanks, mills cannot start crushing. In this scenario, most sugar mills in UP would not be able to start crushing in the new season because almost every factory has, on an average a stock of almost 1.5 lakh quintals still stored in its tanks as of today,” said Deepak Guptara, secretary general of UPSMA.
Bringing this to the notice of the excise minister in an urgent request, UPSMA has stated that due to “sluggish movement in molasses … the molasses tanks continue to be occupied. And since the sugar season 2017-18 is not far away and in order to start crushing, the molasses tanks need to be emptied and necessary maintenance is also to be carried about,” it said. It added that “while the factory maintenance is in full swing, we are unable to make our molasses tanks ready as we hold substantial stock of 2016-17 season. And existing laws prohibit that molasses are mixed for 2 seasons or more.” Requesting the minister for his intervention in the matter, the letter also asks that the government at least alow molasses to be released for captive consumption by the mills immediately, so that tanks are emptied in time and crushing operations are not hampered.
Similarly, in a letter to Deepak Trivedi, additional chief secretary, excise, the principal secretary of sugar and cane development, Sanjay Bhoosreddy has also stated that the24 sugar mills in the cooperative sector are facing the problem of molasses storage due to which proper cleaning and maintenance of the tanks is being hampered. “The issue was raised by the Sugar Cooperative Federation in a July 4 meeting called by the Molasses Advisory Committee and had asked for permission to export molasses out of the state in order to overcome the problem,” he writes, adding that the issue be taken up at the government level at the earliest so that the state does not lose out on its revenue and the issue also does not hamper crushing operations in the new season.
Talking of a solution to the problem, a miller on condition of anonymity said if crushing season 2017-18 has to start from October, the government needs to take immediate decision to allow the lifting of molasses before the new season starts. “The new season cannot start otherwise,” he said.
“Firstly, the country liquor industry should be told to lift its remaining quota of molasses, which is lying with the mills. Secondly, the government can allow an increased transfer for molasses to captive distilleries for producing ethanol and lastly, relax or suspend the quota for country liquor lobby and encourage open market sale on condition that the mills can give an undertaking that they would keep the levy molasses intact for supply as and when demanded,” he said. The residual stock position of molasses of the 93 private sugar mills as on July 31 is approximately 132 lakh quintals while that of the 24 cooperative mills is 16 lakh quintals.