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UP govt raises cane price by 3.3% in FY18

Govt has kept the cane floor price at Rs 255 per 100 kg

Reuters  |  New Delhi 

UP govt raises cane price by 3.3% in FY18

Uttar Pradesh, India's biggest sugar producing state, has raised the must pay for the new crop by 3.3 per cent, a state government source said on Friday.

raised the to Rs 315 ($4.85) per 100 kg for the crop year that began this month, up from Rs 305 in the previous year, the state official, who declined to be named because he is not authorised to speak with media, told Reuters by telephone.

The government has kept the 2017/18 cane floor price at Rs 255 per 100 kg.

Most mills believe that the increase in the price that companies must pay to cane growers in this year is moderate.

"We feel that the SAP (state advised price) fixed by the government is reasonable and can be absorbed by the sugar industry," Vijay S Banka, chief financial officer of Dwarikesh Sugar Industries Ltd, said in a statement.

India, the world's biggest sugar consumer, is expected to produce 25.1 million tonnes of the sweetener in the season that began on Oct. 1, up from 20.3 million tonnes in the previous year, according to the Indian Sugar Mills Association.

Dry weather conditions crimped sugar output in the 2016/17 season and forced the government to allow imports of more than half a million tonnes of the sweetener.

The sufficient monsoon rains this year and large-scale plantings of high-yielding cane varieties are expected to help mills churn out more sugar this year, obviating the need to import sugar.

Higher volumes will also help sugar companies generate more revenues from allied activities such as electricity generation, said Banka.

Indian consumers, who have a famously sweet tooth, are expected to use about 25 million tonnes of sugar in the 2017/18 season, nearly half a million tonnes more than the previous year.

($1 = Rs 65)

First Published: Fri, October 27 2017. 15:57 IST