Faced with a huge unsold stock of sugar and the nagging cane payment crisis, the Uttar Pradesh Government has urged the Centre to double the monthly sugar sale quota of State sugar mills to over 11 lakh metric tons (MT).
Cane Commissioner Sanjay Bhoosreddy has sent a letter to Union Food Secretary to increase sugar sale quota to a little over 11 lakh MT to facilitate speedier liquidation of stocks and payouts to farmers.
He contended that UP sugar mills had a carryover stock of more than 26 lakh MT from the 2017-18 crushing season, when the state had produced over 1.20 crore MT sugar.
During the current season, UP sugar mills are expected to produce nearly 1.25 crore MT of sugar by April next year.
“Of this, the export quota is estimated at 10.75 lakh MT. Consequently, net availability of sugar with State mills is expected to be around 13.60 lakh MT. Hence, the state would require monthly sugar sale quota of 11.33 lakh MT to clear stocks,” Bhoosreddy wrote.
Between June and November, 2018, the effective monthly sale quota varied between 40,000 MT to 8.06 lakh MT, much below the actual requirement, which compounded the crisis.
The state also demanded higher ex-factory floor price of sugar at Rs 3250 per quintal against the present price of Rs 2,900 per quintal, claiming that Kanpur-based National Sugar Institute (NSI) had computed average sugar production cost of UP mills at Rs 3,400 per quintal.