UP sugar mills demand status quo on cane prices
Sugar mills in Uttar Pradesh have urged the State government not to increase sugarcane prices to be given to the farmers as it would hit them.
This is even as the State is likely to register a record sugar output of around 10 million tonnes in the forthcoming season starting next month.
Last year, the outgoing Samajwadi Party had hiked the State advised price (SAP) by ₹25 and fixed it at ₹305/quintal.
While the millers are seeking a status quo on the SAP, growers — at a recently held cane price fixation meeting by the Cane Commisioner — had demanded the SAP to be raised to ₹400 a quintal for the forthcoming season, a source said.
Among the millers’ demands were: not to increase the sugarcane prices, choice of paying the sugarcane prices in two instalments and capping the commission to co-operative societies to ₹2/quintal against ₹7.65 presently.
The Central government in April this year set the fair and remunerative price of sugarcane at ₹255 per quintal for the forthcoming season beginning October against ₹230 last season.
Rise in acreage
There is a substantial increase in sugarcane cropping area and better productivity.
“Increased cane availability and crushing would result in higher production of sugar, molasses and bagasse,” the mills said in a letter written to UP Chief Secretary last week.
“Sugar prices as well as prices of molasses and bagasse are supply-sensitive, and the increased availability pulls the prices downwards. It is expected that the coming season shall see lower sugar and bagasse prices. Needless to say, revenue in the hands of sugar mills shall be substantially reduced,” they said.
The letter said the industry in the State has been suffering losses continuously from 2011 and high sugarcane prices in the State have impacted the industry’s competitiveness.
Cane pricing formula
The overall increase in sugar prices has been marginal when compared with rise in the cane prices.
“Once the sugarcane prices are increased, they cannot be reduced even when the sugar prices fall. In such situations, when the sugar prices are depressed, cane price arrears accumulate and sugar mills incur losses,” the mills said.
They also demanded the government to go for a market-oriented cane pricing system, which they said was not only economically viable but also serves both the farmers and the industry.
Source:Business Line;Published on 26/09/2017