Lucknow / Oct 28, 2020
The sugarcane crushing operations in India’s top sugar producer Uttar Pradesh has begun even as the domestic sugar inventory was pegged at over 10.5 million tonnes (MT) at the beginning of the current season (Oct-Sep) 2020-21.
UP accounts for nearly 40 per cent of the country’s sugar output, and the Indian Sugar Mills Association (ISMA) has projected the state’s sugar production to exceed 12.45 MT in the current season, compared to 12.63 MT in 2019-20 season.
According to UP sugarcane and sugar commissioner Sanjay Bhoosreddy, two Western UP sugar mills, one each belonging to the cooperative and private sectors, had started crushing.
The crushing operations would gain momentum as the days advance and most of the state mills, numbering 119, will be functional in 2-3 weeks.
UP’s sugarcane economy is pegged at Rs 50,000 crore, comprising sugar, molasses, ethanol, power cogeneration etc.
Interestingly, UP private sector millers, numbering 94, collectively owe farmers’ outstanding of nearly Rs 7,000 crore for the previous 2019-20 season. Taking a tough stance, the Yogi Adityanath government has already issued recovery certificates against several private sector mills.
The RCs have been issued under Sections 17 (4) and 18 (3) of UP Sugarcane (Supply and Purchase Regulation) Act, 1953. The action was taken after these mills failed to settle their payment commitments despite repeated warnings. The RC empowers the administration to seize movable and immovable properties, including sugar stock, for auction to settle the liabilities.
Earlier, the second set of satellite images of cane acreage in India was procured in the first week of October 2020. Based on the analysis, the crop area was estimated at 5.27 million hectares (MH) in 2020-21 season, 9 per cent higher than 2019-20 cane area of 4.84 MH.
ISMA estimated the diversion of cane juice and B-molasses for ethanol will reduce sugar output by 2 MT in 2020-21 compared to 0.8 MT diverted in 2019-20. Therefore, after accounting for the reduction in production due to diversion, the domestic sugar in the current season 2020-21 is pegged at 31 MT. However, a better picture would emerge once ethanol tenders are floated by the oil marketing companies (OMC) and the mills bid for the supplies.
Meanwhile, the opening balance of sugar as on October 1, 2020 at 10.64 MT is 5.5 MT higher than the domestic requirement for the initial months of the season till the new sugar stock is not fully available in the market. ISMA underlined that India needed to “continue” to export about 6 MT of surplus sugar during 2020-21.
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