The Centre has made a presumption that UP will make approximately 8 lakh tonne in October and thus help keep the supplies coming during the festival season.
Uttar Pradesh, which is looking at a bumper sugar production of over 10 million tonne in 2017-18, is gearing up to start sugarcane crushing early this year, starting October. As many as 60-odd sugar mills have given their tentative consent to start crushing in October itself to tide over the twin issue of excess cane and to augment the sugar supplies during the festive season. According to available data, of the total 117 sugar mills in the state, almost 60 are preparing to start operations in October, while the rest will follow in November. Talking to FE, Uttar Pradesh Sugar Mills Association (UPSMA) secretary general Deepak Guptara said the reason to start the season early on this year is due to the fact that there is excess cane availability this year. “This year, we are looking at an excess of cane availability. While the cane acreage has grown by 11% as compared to last year, we are also anticipating an increased yield of anywhere between 20%-30%. Add to this the fact that due to demonetisation, there is less diversion of cane for traditional sweeteners such as gur and khandsari by kolhus and crushers. This further augments cane availability. By starting early crushing, we would on the one hand accommodate the farmers and also augment sugar supply during October, thereby obliterating the need for more import of raw sugar,” Guptara said.
In fact, the Centre is banking a lot on UP as far as sugar production in the new season is concerned. According to sources, the Centre has made a presumption that UP will make approximately 8 lakh tonne in October and thus help keep the supplies coming during the festival season. Interestingly, UP sugar millers’ will to start early crushing depends to a large extent on the fact that their molasses tanks are emptied before the start of the season. However, most mills are still holding last season’s molasses stock. Of the state’s total capacity to store 2.5 crore quintal molasses, UP is still holding 1.2 lakh quintals as on August 31. Only Wednesday, the state government relaxed the molasses storage norms and allowed the mills to keep the 20% subsidised molasses for the country liquor industry and sell the rest in the open market.
However, due to the excess molasses supply, prices have crashed drastically, with almost no takers. While a month ago, molasses were being sold at Rs 400 per quintal but now have crashed by more than half. The biggest challenge for both the industry and the government now is to ensure that the molasses stock is disposed of before the new season begins.