Low surplus, high prices may help in clearing dues of farmers in Uttar Pradesh and Punjab
According to industry estimates, sugar production is likely to decline this year due to unseasonal rains in Uttar Pradesh and higher variation in ethanol production. With average retail sugar prices also rising, the reduction in surplus sugar may help expedite cane payments by mills and help farmers clear their pending dues this season.
Late payments and dues have recently become a political flashpoint, especially in the electoral states of UP and Punjab. At the end of July, when the latest figures are available, farmers’ dues stood at Rs 2,417 crore.
Retail sugar prices are 5% higher than last year. In Delhi alone, retail prices have increased by more than 13% in the last three months, as per the monitoring of the Department of Consumer Affairs.
Based on satellite images taken in the second week of October, the Indian Sugar Mills Association (ISMA) estimated that 54.37 lakh hectares have been sown with sugarcane this year, which is about 3% more than the previous season. However, the increased acreage is not likely to translate into higher production.
Due to heavy and unseasonal rains in Uttar Pradesh, especially in the eastern part of the state, both the yield and sugar recovery are likely to decline this year. The production was estimated at 113.5 lakh tonnes in the first advance estimate.
largest sugar producing state
Maharashtra may overtake Uttar Pradesh to become the highest sugar producing state this year due to good monsoon rains and adequate water availability in reservoirs. Although the availability of sugarcane is higher than that of sugarcane, which means that the yield per hectare is expected to be slightly lower than last year, ISMA has estimated the production to be around 122.5 lakh tonnes.
Both the area and yield of sugarcane in Karnataka are higher than last year, which is expected to produce 49.5 lakh tonnes. The rest of the states are expected to collectively produce 53.1 lakh tonnes.
Since 339 lakh tonnes is to be produced, which is much higher than last year’s domestic sales of around 266 lakh tonnes, the sugar industry relies heavily on exports and diversion of ethanol production to reduce the surplus. ISMA estimates that diversion of sugarcane juice and B-molasses to ethanol will reduce sugar production by 3.4 million tonnes, an increase of 13 tonnes over the previous year, and expects exports of at least six million tonnes. Is.
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