Sugar production takes a hit as over 200 private, co-op mills close

As many as 206 sugar mills in the country are sick of which 61 are in the private sector while 145 belong to the co-operative sector, minister of state for agriculture, K V Thomas said in a written reply in the Lok Sabha on Tuesday. He added that two major sugar producing states Maharashtra and Uttar Pradesh account for more than half of these with 63 in Maharashtra and 44 in Uttar Pradesh.  

Tamil Nadu has closed down around 23 mills while the Karnataka government has shut 22. 

Thomas said that the main reasons for the closure/sickness are non-availability of adequate raw material, poor recovery from sugarcane, uneconomic size, lack of modernisation, high cost of working capital, and declaration of high state advisory price of cane. 

He pointed out that 153 sugar mills in the country stopped functioning till 31 March of this season which will end in September. He said that some of these may start operations in the next season. 

A total of 49 mills in Maharashtra and 27 in Uttar Pradesh have stopped working during the period. 

The mills closure is bad news at a time when the output of the sweetner is projected to fall by over a million tonnes to 15.5 million tonnes in the 2008-09 season against the domestic demand for 22.5 million tonnes.