Lucknow: In what could be termed as a sweet news for the common man in times of coronavirus pandemic, the price of sugar has fallen by around 11% following a dramatic fall in demand, according to the figures compiled by the UP Sugar Mills Association (UPSMA).
The price of sugar which was hovering in the range of Rs 3,500 per quintal in early March has now dipped to Rs 3,100 per quintal due to the closure of hotels and restaurants. However, the dip in demand as well as price has left sugar millers in a quandary.
According to UPSMA data, the development has severely hampered the paying capacity of sugar millers with cane payment arrears crossing Rs 14,000 crore, which is 55.53% of the total dues. In May last year, cane payment arrears were around Rs 11,000 crores which was over 64% of total dues proposed to be paid to cane growers. In a letter to chief minister Yogi Adityanath on May 8, UPSMA president CB Patodia said the mills were finding it difficult to follow cane payment cycle and demanded a bailout package by way of cash subsidy to augment cash flow of sugar mills.
Talking to TOI, principal secretary, sugar development, Sanjay Bhoosreddy said liquidity of sugar mills has been severely affected due to lockdown. “Sale of sugar was expected to pick up after Holi when there is high demand of sugar for manufacture of beverages and ice-creams. But due to coronavirus pandemic, sale has been affected.”
The situation has been further aggravated by the fall in demand for ethanol which is mixed with petrol for fuel consumption. Data show that as against the required quantity of over 61 kilo-litres per day, the consumption of ethanol produced by sugar distilleries fell to merely 13 kilolitres per day. This was only 21% of the total contracted supply. Till May 4, only 655 million litres of ethanol was picked by oil manufacturing companies (OMCs) as against the contracted supply of over 1800 million litres. The average blending percentage was only 4.55%. “This problem has been resolved with the supply of ethanol to Madhya Pradesh, Bihar, Odisha and north-eastern states. UP sugar mills produced 116.52 lakh tonnes of sugar as on April 30, 2020, which is 3.72 lakh tonnes higher than the production of 112.80 lakh tonnes last year. Out of 119 mills operating this year, 44 have ended crushing while 75 mills continue operations this year, as compared to 68 which were operating as on April 30 last year.
The pace of closure of factories has slowed down a bit during the last fortnight as cane availability has increased for crushing in the current season due to premature closure of gur/khandsari units operating in the state.
“About 75% factories have closed in east UP and the remaining are expected to close by next week,” a UPSMA official said. About 30% factories have closed in central UP and the remaining are expected to shut operations in next 15-20 days. In west UP, 3 factories have closed so far, some are expected to start closing by this week, whereas others may continue to operate till month-end.
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May 12, 2020 at 06:24AM
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Sweet tidings for common man, bitter blow to millers - Times of India
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