UP sugar output in current season seen down 10% on year

The dip in production is primarily due to diversion into ethanol production, but rising disease and pest infestation also impacted the output.

UP sugar output in current season seen down 10% on year
This year it has struggled to reach 10.04% and with the weather turning warmer than expected, industry watchers fear that the average recovery will fall further by the end of the season.

Sugar production in Uttar Pradesh, the country’s largest cane producing state, is likely to fall around 10% year-on-year to under 100 lakh tonne (LT) in the October 2021-September 2022 season, according to industry sources.

The dip in production is primarily due to diversion into ethanol production, but rising disease and pest infestation also impacted the output. Sugar recovery has been gradually falling in UP. While in 2018-19 it had hit a record 11.46%, it decreased to 11.30% in 2019-20, while in 2021-22 the recovery was at 10.76%. This year it has struggled to reach 10.04% and with the weather turning warmer than expected, industry watchers fear that the average recovery will fall further by the end of the season.

“Temperatures have suddenly started rising. It has already reached 37-38 degrees and by next week we are expecting it to cross 40 degrees. The sudden increase in temperature is expected to have an adverse impact on the sugar recovery,” said a miller.

While industry body ISMA had estimated 102 LT of sugar output in the state in 2021-22 as against 110.59 LT in the previous year, field reports suggest that the number is expected to fall further due to a decreased availability of cane, lower-than-expected recovery and yield.

“As many as 25 sugar mills have already stopped crushing operations — most of them being in Eastern UP. As things stand, we expect a majority of them to close operations for the season by April. Generally, mills in UP keep crushing till June,” said an official of the cane department.

As of March 21, sugar mills in UP had crushed nearly 780 LT of cane and produced 78 LT of sugar. In terms of due payment to the farmers, out of Rs 25,000 crore — the mills had paid Rs 17,660 crore, which is approximately 70% of the payment. The outstanding dues stood at Rs 7,400 crore.

An estimated 34 LT of sugar is expected to be diverted into ethanol production in the country using diversion of sugarcane juice /syrup or B-heavy molasses. Of that, almost 11 LT will be from Uttar Pradesh, followed by 10.4 LT in Maharashtra and 7.3 LT in Karnataka.

An official of the sugarcane department in Uttar Pradesh told FE that he is expecting sugar production in the state to be around 100 LT. “A lot of stress is being laid on getting sugar mills to divert to B heavy ethanol, as it will not only avert the situation of a sugar glut but will also help the sugar mills in clearing cane payments. In UP, almost 11% of the sugar is expected to be diverted to ethanol and another 4% would be less due to climatic conditions. We are looking at a production figure close to 100 LT this year,” he said.

ISMA had revised upward India’s sugar output estimate to 314.5 LT for the ongoing 2020-21 marketing season in its second advance estimates, as against its earlier estimation of 310 LT.

Get live Share Market updates and latest India News and business news on Financial Express. Download Financial Express App for latest business news.

Photos