In continuation of our State-wise series on sugarcane and sugar outlook in the 2023-24 Sugar Season(SS), today we focus on Uttar Pradesh, the top sugar producing State in the country.
What is the sugar production outlook in the State and can we expect any surprises this season? To answer these questions, we have a young scion representing the sugar industry.
Ms. Avantika Saraogi, Promoter & Business Lead- New Initiatives at Balrampur Chini Mills Limited said that sugar production in UP will see an increase of 5%, much in line with the expectation of ISMA. She said that sugar prices will likely to remain firm in the country. She added that State Advised Price (SAP) of sugarcane in UP might see a slight increase.
Q. What is your expectation from Uttar Pradesh, in terms of sugarcane acreage and production? Do we expect higher sugar production than the previous season?
Ans– It is definitely hard to say at this point since it’s quite early in the day, but we concur with ISMA’s figures of approx. 5% increased production, which could be positively impacted due to the levy molasses policy increase & robust sugar prices.
Q. What is your outlook on sugar prices in the season? Do we see prices at the current level, or there could be an uptick?
Ans- I think the sugar prices will remain firm, with no real uptick.
Q. Uttar Pradesh is expected to increase SAP? What is your understanding regarding how much SAP can be increased, considering National elections are a few months away?
Ans- I think that the UP Government has shown its intelligence in the past. When the national elections were held, SAP was not increased even though FRP was increased. They understand that SAP and winning elections have little to do with each other. But having said that, I think there might be a small increase in SAP, not a sharp jump.
Q. The OMCs have issued a robust ethanol procurement tender. How much will UP supply in the current ESY?
Ans- It is impossible to say at this point, we will have to wait and watch.
Q. Are there any issues facing the State’s ethanol production?
Ans– Higher sugar prices and the change in levy molasses policy might slightly reduce the production ethanol for petrol blending. But overall, I don’t see any major problems per se in State’s ethanol production.
Q. What are the challenges that are facing UP and overall sugar season in the country? Any Government policy that you may like to be relooked into that will ensure a smooth sugar season for the industry?
Ans– I think this year some parts of West UP are plagued with red rot, which we as a company have borne the brunt of and emerged out of already, therefore crush and recoveries might be affected, but again it’s too soon to quantify. Overall of course we know about Maharashtra and Karnataka, both States are facing cane availability issues.
The Central Government needs to declare sugarcane-based ethanol prices soon, and the UP State Government should announce SAP. I would like to commend the way the Government has handled the entire value chains of sugar and ethanol.
