After the initial hiccups, as many as 81 sugar mills out of 119 in Uttar Pradesh have got into cane crushing operations. Just over two weeks into the new crushing season, the mills have procured 161. 04 quintal cane to produce 13.91 lakh quintal sugar.

During the same period last year, only 30 mills had started crushing and had produced 2.11 lakh quintal of sugar. The recovery of sugar, too, has shown an increase this year with an average of 8.64% against 7.48% in the same period last year.

The early conclusion of talks between the government and mills on subsidies and other incentives this year seems to have helped the industry.

The payment of last year’s cane dues, too, has also shown a positive trend with mills managing to pay off R18,230.70 crore out of the total R19,388.17 crore. “The cane dues for the season 2013-14 have now come down to R1,157 crore and we are trying to get the mills to pay off the remaining dues at the earliest,” said an official of the sugarcane department, adding that the total dues should be cleared by the middle of December.

Of the 81 mills that have started crushing, 61 are private mills while 19 are run by the Uttar Pradesh State Sugar Cooperative Federation and one by the UP Sugar Corporation. “There is no reason to worry as late crushing is not likely to hamper the final sugar production figure in a big way.

Sugar recovery improves only when the cane matures properly as is the case this year. Though we started late, it will not make a big difference on the final sugar production figures,” said a sugar miller.

However, according to industry experts, the flip side of this delay is the probability of cane getting diverted to the unorganised sector. “The unorganised sector, comprising kolhus, crushers and khandsari units, usually takes advantage of the delay in start of crushing. And for all those farmers who are unable to wait for the mills to start operating and are in desperate need of money, the only option is to go to these units and sell their crop at a much lower price,” an expert said.

Usually, an average of 50% of the total sugarcane produced by the state is drawn by sugar mills while 30% goes towards making gur, 5% towards khandsari units and the rest 15% towards seeds and as fodder. “By starting late, the millers have allowed the unorganised sector to make inroads into cane availability. As it is, none of the mills has enough cane to last the entire season and most of the time they are running the mills on around 70% capacity only due to shortage of cane,” said an  industry source.

“A lot of effort is put into identification and introduction of new varieties, inter-cropping to increase farmer’s income and to sustain sugarcane area, etc, but despite all these efforts, a major chunk of early maturing variety of sugarcane in UP is diverted towards these local gur and khandsari units, which are free to purchase sugarcane at much lower prices as compared to sugar mills.

This is impacting national growth as well as sugar millers,” says a sugar miller, adding that this in a way leads to huge cane arrears in UP, which is home to about 25,000 jaggery/gur units and about 50 khandsari units. “It has been a pattern for a long time that gur units in UP roughly consume 30%-35% of the cane, especially of the early crop, when mills do not start crushing operations,” he said.