On May 15, the Supreme Court had granted four weeks to the state sugar mills for clearing the dues for the entire 2007-08 season (October-September). This period ends on June 12.
"Private sugar mills in UP bought sugarcane worth Rs 6,993 crore in the 2007-08 season. Of this, payment of Rs 6,150 crore has been made and Rs 843 crore remains as dues. We need more time to clear them," said C B Patodia, president, UPSMA and advisor to the Birla Group of sugar companies.
The state government had announced a price of Rs 125-130 a quintal for the 2007-08 season. But mills delayed operations protesting against this high price. These mills are already incurring losses due to high sugarcane and low sugar prices.
The mills delayed crushing by a month and began only after the Lucknow bench of the Allahabad High Court declared an interim cane price of Rs 110 a quintal in November.
This price was upheld by the Supreme Court, which on May 15 directed mills to make entire payments within four weeks.
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Sugar prices have crashed from Rs 1,525 to Rs 1,450 a quintal since May as the government dismantled the two-million-tonne buffer stock created last year, thereby increasing supply in the open market.
This has exerted pressure on sugar prices despite an anticipation of a drop in sugar output to about 26 million tonnes from 28.4 million tonnes in 2006-07, said Patodia.