Arrears of Rs 1,900 cr have bitter taste

Sugar mills in the state of Uttar Pradesh (UP) are worried with mounting cane arrears pertaining to the 2012-13 crushing season underway.

According to latest statistics, the mills account for arrears of about Rs 1,900 crore, against the total payable amount of Rs 3,164 crore. .

Private mills account for the bulk of payments at Rs 1,046 crore followed by cooperative units.

State mills have total dues in excess of Rs 5,600 crore . However, they get 14 days to pay the outstanding dues, which had reduced their payable liability to Rs 3,164 crore.

As crushing advances, the arrears would rise further due to the high cane price in the state, the sugar industry has rued.

So far, 1.78 million tonnes (mt) of sugar has been produced in UP, compared to two mt last year.

According to official figures, about 121 sugar mills are operating in the state and had collectively crushed over 20 mt of sugarcane.

Thus, the recovery percentage stands at 8.74 per cent, compared to 8.40 per cent last year.

On December 7, the state government had announced the sugarcane State Advised Price (SAP) for 2012-13, which was 17 per cent higher for the common variety compared to 2011-12.

SAP now stands at Rs 280/quintal for common variety vis-à-vis Rs 240/quintal last year , which forms the bulk of the sugarcane grown in UP.

The prices for early and rejected/unsuitable varieties of cane have been hiked to Rs 290/quintal and Rs 275/quintal compared to Rs 250/quintal and Rs 235/quintal respectively.

The hike is likely to translate into total sugarcane payments of Rs 21,500 crore to farmers this crushing season, compared to Rs 18,200 crore during 2011-12.