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Posted on Dec 19, 07:55AM | UNI
After a slump in sugar production in the country during November, it picked up in December after crushing started in a big way in Uttar Pradesh, according to Indian Sugar Mills Association (ISMA) here today.
Sugar production at the end of November was 2.7 per cent lower as compared to production same time last year. But, with crushing starting well in Uttar Pradesh, which actually commenced late, the sugar production upto December 15 has crossed the production achieved last year during the same period. It is more by 2 per cent, at 49.06 lakh tonness against 48.15 lakh tonnes same time last year.
The ISMA said a total of 455 mills are operational as on December 15 but it is 18 less as compared to 473 mills last year.
The Uttar Pradesh government has declared an all-time high SAP for sugarcane, which is Rs 40 per quintal higher than last year. With 17 per cent hike in SAP since last year, the cane prices offered by sugar mill that is the SAP, are more lucrative than the prices offered by the local millers.
Though the UP mills could have a better capacity utilisation this year and reduce the average fixed costs, the historically high SAPs in UP, leading to high costs of production, is nullifying the expected benefits.
The ISMA press statement here said that the difference between prevalent ex-mill prices and the resultant cost of production in UP, could lead to losses to mills to the tune of Rs 4000 crore, which might reflect in the form of cane price arrears in 2012-13.
ISMA has estimated 79 lakh tonne of sugar production in UP in 2012-13.
Uttar Pradesh has already produced 10.33 lakh tonnes of sugar.
This is about 20 per cent less than last year same time. Last year, 121 mills were operational as against 116 mills this year.
This is because a few mills is East UP have to still start their crushing. With 8.56 per cent sugar recovery till now, it is better than last year.
ISMA is expecting a total sugarcane production of 140 million tonne, of which 85-86 million tonness would be available to the sugar industry.