Sugar production in Uttar Pradesh, which is India's second largest sugar producer, has touched two million tonnes (mt) in the current crushing season.

According to the latest statistics, 118 operational mills had collectively crushed nearly 21.5 mt of cane and produced almost two mt of sugar.

The sugar output is about 35 per cent higher, against 1.46 mt in the corresponding period last year, as crushing operations had been invariably delayed during 2013-14.

The state has 94 private mills, 23 cooperative sector mills and the Uttar Pradesh State Sugarcane Corporation.

The bulk of sugar has so far been produced by private mills at about 1.8 mt.

The sugar recovery (ratio of sugar extracted from cane) percentage stands at 9.25 per cent, which historically has been lower than corresponding figures clocked by mills in Maharashtra and Karnataka due to their higher juice content in cane and better varieties.

Meanwhile, cane arrears have started mounting for the current season also, with Rs 1,156 crore (including interest) pending as payable dues on mills, of which Rs 987 crore are accounted for by private millers.

While total dues stand at Rs 5,381 crore so far, the state government had allowed mills to pay Rs 40 a quintal of the Rs 280 a quintal of the state cane price by the end of the crushing season.

This reduced their current liability to Rs 4,609 crore. Besides, the mills get 14 days to settle dues, the current payable arrears stand at Rs 3,200 crore, of which the mills had paid Rs 2,049 crore.

The state sugar sector is facing a crisis of sorts, with the mills alleging high cane price juxtaposed to falling sugar prices, dumping of sugar produced in other states to Uttar Pradesh, low sugar recovery and lack of incentives.