Uttar Pradesh clocks highest ever sugar production

The increase in UP’s production is significant when seen in the national context, which has posted a 19% decline in production from 32.61 million tonne to 26.36 million tonne till May 15.

Despite a two-month-long lockdown, which has wreaked havoc in most other sectors in the economy, Uttar Pradesh sugar industry has achieved a record production of sugar so far. Till May 27, the state’s sugar mills had produced 124.92 lakh tonne of sugar against the previous highest of 120.45 lakh tonne in 2017-18 sugar season. Last year on the same date, the state had produced 117.68 lakh tonne.

The increase in UP’s production is significant when seen in the national context, which has posted a 19% decline in production from 32.61 million tonne to 26.36 million tonne till May 15.

Speaking to FE, principal secretary Sanjay Bhoosreddy said of the 119 sugarmills operational in the state, 94 had closed down while 25 are still operational. Last year on the same day, 109 out of 119 had shut shop.

“Farmers are our priority. So till the time the cane is standing in the fields, we have directed the mills to continue crushing,” he said, adding that he expects the season to close in about a week’s time.

Interestingly, the crushing season in UP this year has got prolonged as most of the gur and khandsari units had to close shop prematurely due to lockdown, as a result of which a significant portion of cane that would have gone to them had to be diverted to the sugarmills for crushing in the current season.

As a result of extensive crushing, sugarmills have also piled up huge cane dues of over Rs 15,000 crore, especially because the institutional sale of sugar had been almost nil during the lockdown.

“We have been literally caught between the devil and the deep sea. On one hand, we have huge cane arrears and on the other, all our sources of revenue had dried up in the last two months. Sugar sales have been hit by the closure of malls, restaurants, cinema halls, etc. To top it, our ethanol sales also plunged as oil manufacturing companies were not lifting the stocks and our cogen dues worth Rs 1,050 crore are also stuck up with UPPCL.

“The problem with highest output is that we also end up posting highest arrears. While there is immense pressure on us to make payments to farmers, our liquidity needs to improve for us to do so,” said a miller, requesting anonymity.