Somebody’s loss is somebody else’s gain. This certainly holds true for sugar today where extreme drought has taken a heavy toll of Maharashtra’s production, even as millers in Uttar Pradesh (UP) seem set for behatar (better) if not acche (good) din after an extended period of gloom.
Sugar output in Maharashtra is likely to fall to around 83 lakh tonnes (lt) in the current 2015-16 season, from the all-time-high of 105.14 lt for 2014-15. Moreover, it may drop further to 60 lt “plus or minus 2.5 lt” in 2016-17, according to Sanjeev Babar, managing director, Maharashtra State Co-operative Sugar Factories Federation.
Lower plantings from dry weather in Maharashtra and Karnataka — which will impact cane availability even more in the ensuing season from October — is what’s been driving up sugar prices in recent months. Average ex-mill realisations have risen from Rs 26.30 per kg in October to Rs 32.50 this month in UP, while correspondingly going up from Rs 24.79 to Rs 30.50 in Maharashtra. On Wednesday, they ruled still higher at Rs 35 and Rs 33/kg respectively.
The benefits of this will, however, go primarily to UP mills. They are expected to produce 70-71 lt of sugar this season, the same as in 2014-15 notwithstanding a decline in cane area from 21.47 lakh hectares (lh) to 20.52 lh. In 2016-17, UP may displace Maharashtra as the country’s top sugar producer, with output projected to cross 75 lt. Its mills, thus, stand to gain from both increased production and improved realisations — which might even help the ruling Samajwadi Party in time for the state elections due in May 2017.
Abinash Verma, director general, Indian Sugar Mills Association (ISMA), attributes UP’s robust production to two factors.
The first is favourable climatic conditions for higher sugar recovery from cane. Sugar accumulates in cane most when the gap between maximum and minimum temperatures is at least 50 per cent. While the
crop is in maturity phase, night temperatures should ideally not go below 15 degrees Celsius and day temperatures, too, must remain within 25-30 degrees. This optimal range is usually reached after mid-October till November-end.
But in sub-tropical northern India, including UP, the onset of peak winter from mid-December through January reduces sucrose accumulation. That is a key reason for sugar recovery in UP historically averaging 9-9.5 per cent of cane weight, as against roughly 11.5 per cent for Maharashtra and 12.5 per cent or more in the southern districts of Kolhapur and Sangli. This time, though, the northern cane belt experienced ‘ideal’ climatic conditions similar to that in southern Maharashtra and northern Karnataka (Belgaum, Dharwad, Bagalkot and Bijapur). The winter was relatively mild, with temperatures not dropping too low. This was accompanied by clear sunshine, thanks to no fog or cloud formation. Besides, dry weather and low humidity made the crop less vulnerable to pests (root borer, early shoot borer, top borer and pyrilla) and diseases (red rot, smut, wilt and grassy shoot disease). “Even the poor monsoon helped this time, as there are many low-lying cane-growing areas in central and eastern UP — including Lakhimpur Kheri, Hardoi, Sitapur, Gonda and Basti — normally prone to water-logging,” notes Verma, while admitting that 2015-16 was a “one-off” year.
But a second, equally important, factor has been the spread in planting of new high-yielding varieties, especially Co 0238, Co 0239, Co 98014, CoLk 94184 and CoSe 01434. Till 2012-13, these varieties, which also give higher sugar recoveries, weren’t cultivated by farmers. But in the 2015-16 season, they together covered nearly 30 per cent of UP’s cane area. As a result, even with acreage falling by 3.71 lh or 15.3 per cent between 2012-13 and 2015-16, the state’s sugar production has dropped only marginally from 74.85 lt to 70-71 lt: It is actually slated to rise to 75 lt in the 2016-17 season. The most significant development during this period has been the increase in average sugar recovery — it is likely to be 10.6 per cent this season — even while dipping in Maharashtra.
“Nobody ever thought recovery rates in UP would cross double-digits. The credit goes partly to favourable weather, but mainly to the new varieties that give minimum 9.5 per cent recovery even for 10-month cane crushed in mid-November. This minimum rises to 10.5 per cent for 11-month and 11 per cent for 12 month-cane,” says Narendra Singh, former cane development advisor at ISMA and now with Balrampur Chini Mills Ltd. Singh, while in ISMA, played a major role in undertaking performance evaluation trials of the new cane varieties in 24 mills of UP, Bihar, Uttarakhand and Haryana during the 2007-08 to 2009-10 sugar seasons.
The effects can be seen even at mill level. Dwarikesh Sugar Industries estimates the average sugar recovery for its three mills at 11.60 per cent for 2015-16, up from 9.81 per cent in 2012-13. “It will be 11.90 per cent at our Bundki (Najibabad) factory, where over two-thirds of the cane crushed is accounted for by the Co 0238 variety whose share will climb to 80 per cent in 2016-17,” claims Vijay S Banka, chief financial officer of the company.
Among individual mills, the highest cumulative average recovery for this season — crushing is almost coming to an end — has been recorded by the Seksaria Biswan factory at Sitapur (12.32 per cent). Balrampur Chini’s Kumbhi (11.85 per cent) and Gularia (11.75 per cent) units in Lakhimpur Kheri have also registered impressive recoveries.
Improved realisations and recovery rates should also help UP’s cane growers, who have since 2012-13 been receiving an unchanged Rs 280 per quintal state advised price (SAP). Worse, mills haven’t been able to pay even this rate: As on March 28, they owed growers Rs 267.56 crore out of the Rs 20,646.02 crore value of cane that was crushed in the previous 2014-15 season. This is over and above the outstanding unpaid dues of Rs 4,033.60 crore for the current season. These arrears may well be cleared in the coming days as behatar din turn into acche din.
The Cane Man
If there’s one person to be credited no less for the UP sugar industry’s turnaround in fortunes, it is Bakshi Ram, director of the Sugarcane Breeding Institute (SBI) at Coimbatore. The 56-year-old has bred Co 0238, the wonder cane variety covering about 5.25 lakh hectares (lh) in the 2015-16 sugar season. That includes 4.03 lh in UP, 0.60 lh Punjab, 0.36 lh in Haryana, 0.17 lh in Bihar and 0.08 lh in Uttarakhand.
Co 0238 has been a major contributor to sugar recovery from cane crushed by UP mills rising to an average 10.6 per cent this season, from 9.3 per cent over the preceding 10 years. The increase would be even more — between 1.5 to 2 percentage points — for factories where this variety constitutes a significant share of the total cane crushed.
A one percentage point rise in recovery rate isn’t small. For mills in UP expected to crush roughly 670 lakh tonnes (lt) in 2015-16, it translates into 6.7 lt of additional sugar. That, at Rs 30 per kg, is worth Rs 2,010 crore.
But it isn’t higher sugar recovery alone. Before Co 0238, the most widely cultivated cane variety, CoS 767, yielded 60-65 tonnes per hectare on most farmers’ fields. Co 0238, by contrast, gives upwards of 75 tonnes, with many farmers harvesting 100 tonnes and more. Even taking a 10-15 tonnes yield gain, the extra income to the farmer, at the state advised price of Rs 280/quintal, works out to Rs 28,000-42,000 per hectare.
Bakshi Ram developed Co 0238 while heading SBI’s regional station at Karnal. The variety was released in 2009. What makes Co 0238 different is that it is a ‘medium-thick’ variety. The average thickness of each cane stick is about 2.6 cm, going up to 3 cm. This was as opposed to the varieties hitherto grown in North India, which were all ‘medium thin’, ranging from 2 to 2.25 cm.
“I was clear from the start that cane yields in the North cannot go up without increasing thickness to the 2.5 cm levels of Maharashtra,” recalls Bakshi Ram. This wasn’t easy because higher yields by augmenting thickness also meant lower sugar recovery. “Breaking this negative correlation and breeding a variety combining both high yields as well as recovery was a challenge. Further, the variety had to be resistant to red rot (a major fungal disease that drastically retards yields and also juice content in the cane). The traditional medium-thin varieties are relatively red rot-resistant,” he points out.
Co 0238 achieved the seemingly impossible by combining high yields with high recovery, alongside resistance to red rot. Moreover, it is early-maturing, attaining 18 per cent sucrose and 85 per cent juice purity even at 10 months. The last comparable variety North India had was Coj 64, released in 1977-78 and which farmers stopped growing after its susceptibility to red rot.