The usual operating season of the sugar mills is from November to March, but in the current season 2008-09 the crushing season lasted for less then two months.

Of the 132 sugar mills in operation during the current season, 17 mills in cooperative sector, 8 in public sector and five mills of the private sector have stopped operations. An official of the Cane department said all mills are likely to close down by the end of this month.

The Cane department had estimated sugar production around 60 lakh tonne, but it may hardly cross 40 lakh tonne, against a record 86 lakh tonne in 2006-07.

Against the Power Purchase Agreement (PPA) signed by 41 sugar mills with the UP Power Corporation Limited to supply 1,022 MW of power to the grid, the maximum generation was only 699 MW due to shortage of bagasse — the raw material required for firing the furnace of the power plant.

In Uttar Pradesh, around 22 distilleries produce industrial, potable alcohol and power alcohol for mixing with petrol, the production of which is down by 30 per cent. The normal annual production is 4.120 lakh kilolitres.

The drop in sugarcane production, coupled with the diversion of the crop to jaggery and khandsari units in UP, had created a crisis situation for sugar industry. 

For the first time in several decades, as many as 20 mills closed down in January due to shortage of sugarcane, and another 10 stopped crushing in February. Even while the mills functioned, they weren’t able to use their full capacity. 

In 2008-09 season, the area under sugarcane has reduced by 7.10 lakh hectares to 21.40 lakh hectares as compared to last year. Sugarcane production is estimated to be 1,155 lakh tonne against 1,608 lakh tonne last year. 

According to the cane department, there are 435 khandsari units in UP.