Low cane output in UP to spark row between sugar mills, gur units

Lucknow: It will be an all-out war between sugar mills and gur and khandsari units in Uttar Pradesh this year. As production of sugarcane is expected to be at an all-time low due to a gradual shrinking of the crop area over the years coupled with drought-like conditions in the sugarcane growing belt, the battle is likely to get murkier between the two important components of the sugar industry, with each of them wanting to increase the drawal percentage of cane towards it.

Even though the crushing period is still two months away, signs of conflict are already visible, with sugar mills seeking a restriction on the operations of gur and khandsari units till January 15 next year, so that more sugarcane is available for crushing by the mills. In a letter to the state government, the Uttar Pradesh Sugar Mills Association has sought a restriction on the gur and khandsari units in view of the fact that the area under sugarcane cultivation in Uttar Pradesh is expected to drop by nearly 16%. Citing the severe shortfall of sugar in the country and spiraling prices, the association has said that if the restriction is imposed, an additional one million tonne of sugar will be produced in the next season.

At present, of the total sugar produced by the state, around 40% is drawn by sugar mills, 15% goes in seeds, about 5% is consumed by khandsari units, while the rest goes for making gur, juice and to be used as fodder and for chewing. “Last year, the drawal by the gur and juice segment was 45% as they started off early in October itself, while the sugar mills started crushing in November. This year, too, the competition between sugar mills and gur and khandsari units will be stiff, with each wanting to eat into the other's pie. Already these cottage units have pledged sugarcane growers an instant payment of Rs 170 per quintal, while mill owners are waiting for the state government to declare the state advised price (SAP),” says a sugar industry source, adding that the farmers are anyway upset with sugar mills for making delayed payments every year.

“The sugarcane crop is known as a cash crop by name only, otherwise everything about it is based on deferred payments. It may take months and sometimes years for millers to clear off the cane dues. In fact, millers treat farmers...


Source:financialexpress