Sugar production touches 315 lt; UP, Maharashtra spring surprise in actual output

With pan-India sugar production reaching 31.49 million tonnes (mt) so far this season since October 1, against 31.7 mt estimated for the whole season (October-September), the government is hopeful of meeting the target as crushing in Tamil Nadu and Karnataka in the second period may help tide over the deficit.

However, a striking feature of this sugar season was noticed in Maharashtra and Uttar Pradesh. Both officials and industry had estimated sugar output in Maharashtra to drop to 9.2 mt this year from 10.53 mt last season. But the actual production touched 11.01 mt, with all mills having closed down their crushing operations.

On the other hand, production in UP was estimated at 11.54 mt, but actual production is now at 10.35 mt. In the last season mills in UP had produced 10.48 mt of sugar.

Sugar production in the third largest producer, Karnataka, has reached 5.26 mt so far, against estimates of 5.1 mt for the whole season. Last year, the state had produced 5.98 mt of sugar.

Of Rs 1.05 lakh crore in cane dues to be paid by mills to farmers for buying their sugarcane at government-fixed rates, so far 88 per cent payment has been made by the industry. If Uttar Pradesh, where the cane arrear stands at Rs 5,921 crore, is excluded, over 90 per cent of cane dues have been cleared by mills this year in other states.

The government feels that its sugar policy has helped maintain price stability in prices throughout the year, despite initial apprehensions about a drop in output. Currently, the all-India average retail price is about Rs 44.50/kg, whereas the average ex-mill price is Rs 3,710-3,810/quintal.

Industry has been demanding permits for export of 2 mt of sugar this year amid the comfortable stock as well as forecast for an above normal monsoon this year.

However, sources said the government wants sugar stock sto remain in the country so that more ethanol can be produced in the next season and lower production next year could be offset from the current year’s surplus.

The ethanol blending with petrol (EBP) target for this year was 15 per cent, whereas in the first six months of the current ethanol supply year, the blending is only 12.09 per cent. EBP of 12 per cent was achieved in the last season.

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