Cane arrears of UP mills to treble next season

Expected to touch Rs 3,000 crore on low sugar prices

The private sugar mills in Uttar Pradesh are expected to owe about Rs 3,000 crore in arrears to cane farmers at the start of the next sugar season. This follows the Allahabad court order fixing the cane price at Rs 110 a quintal.

"While the private sugar mills owed about Rs 1,000 crore to farmers at the start of the current season, it is expected to treble next season, as we do not have the resources to make the entire cane payment," said C B Patodia, president of the Uttar Pradesh Sugar Mills' Association and advisor to the Birla Group of Sugar Companies.

While the state government had announced a state advised price (SAP) of Rs 125-130 a quintal, the Allahabad High Court had announced an interim cane price of Rs 110 a quintal following the writ petition filed by a number of mills, challenging the state's mechanism for fixing the SAP. However, mill owners claimed they would continue to make losses even if they buy cane at Rs 110 a quintal as sugar prices were low.

In a meeting with state sugarcane development minister Naseemuddin Siddiqui on Saturday, the private mill owners assured that they would begin crushing by month-end but also made a case for some financial subsidy to mills so that they make 100 per cent cane price payments to farmers.

The private mills purchased cane worth Rs 9,091 crore in the last season, which is expected to rise to Rs 12,000 crore this year due to new capacity additions and more cane area.

The total crushing capacity in the state for the current season is estimated at 8,02,779 tonnes crushed daily (tcd) up 12.87 per cent from last season's 7,11,279 tcd as new mills of Bajaj Hindusthan, Balrampur Chini among others are getting commissioned. Owing to this increase, mills will be crushing more sugarcane.

---

COURTING TROUBLE

The state government had announced a state advised price of Rs 125-130 a quintal

The Allahabad High Court in an interim order fixed cane price of Rs 110 a quintal following the writ petition filed by a number of mills

The private mills are expected to purchase cane worth Rs 12,000 crore this year