Sugar output up by 2pc at 4.9 mln tonnes so far: ISMA

New Delhi. Sugar output in the country rose marginally by two per cent to 4.9 million tonnes in the first two-and-half months of the ongoing marketing year, even as output in Uttar Pradesh is lagging behind, according to the industry body ISMA. It also voiced concern over higher cane price announced by Uttar Pradesh saying that a 17 per cent hike in State Advisory Price (SAP) could lead to losses of Rs 4,000 crore, that could reflect in cane arrears this year. "With crushing starting in Uttar Pradesh, which actually commenced late, sugar production upto December 15 of the current year is more by 2 per cent at 4.9 million tonnes, against 4.81 million tonnes in the same period last year," Indian Sugar Mills Association (ISMA) said in a statement. Sugar output was higher despite less number of mills remaining operational. As many as 455 mills were functioning as on December 15 this year, against 473 mills in the year-ago. Maharashtra, the country's leading sugar producing state, produced 1.88 million tonnes of sugar in the first two-and-half months of the current year, as against 1.83 million tonnes in the year-ago period. ISMA observed that capacity utilisation in Maharashtra was better as 155 mills, which were operating as on December 15, had crushed more sugarcane when compared with last year. Total sugar output from the state is expected to be 6.5 million tonnes in 2012-13 mainly due to lower production and diversion of cane to fodder. However, sugar recovery would be at last year's level of 10 per cent, it added. Uttar Pradesh, the country's second biggest sugar producing state, has produced 1.03 million tonnes of sugar so far this year, 20 per cent less from over year-ago period. Only 116 mills were functioning as against 121 in the year-ago period because few mills in eastern region were yet to begin their crushing, ISMA said, adding that sugar recovery of 8.56 per cent till now was better than last year. ISMA has estimated 7.9 million tonne of sugar production in UP in 2012-13. On impact of hike in cane SAP on millers, the industry body said: "Even though UP mills could have a better capacity utilisation this year and reduce the average fixed costs, the historically high SAPs in UP, leading to high costs of production, is nullifying the expected benefits". The difference between prevalent ex- mill prices and the resultant cost of production in UP, could lead to losses to mills to the tune of Rs. 4000 crore, which might reflect in the form of cane price arrears in 2012-13, it said. The UP government has increased sugarcane SAP by Rs 40 to a maximum of Rs 250 per quintal for this year.