No interim relief to UP sugar mills against SAP

The Allahabad High Court today refused to pass any interim order staying the cane state-advised price (SAP), which has been challenged by the Indian Sugar Mills Association (ISMA).

ISMA had challenged SAP on November 4 terming it arbitrary. Announced on October 18, SAP was this year hiked by a record Rs 15 per quintal compared with the last season.

The petition alleged SAP was arrived at arbitrarily and did not consider the “losses” incurred by the sugar industry in the last two years. The sugar industry expressed its willingness to pay around Rs 112 per quintal.

Hearing the petition, a Division Bench comprising Justice Arun Tandon and Justice Dilip Gupta said the court would pass the final judgement after hearing the arguments. The state government and the sugar federation filed counter affidavits in the case.The petitioner filed a rejoinder.

Meanwhile, Kisan Mazdoor Sangh leader VN Singh has filed an application seeking his inclusion as a party to the case. Hearing in the case will continue tomorrow.

According to sources, the federation is likely to apprise the court about the acceptance of SAP by some sugar mills in the state.

For the 2008-09 crushing season, the state government has announced SAP of Rs 137.50 per quintal of cane for the rejected variety, Rs 140 for the general variety (up from Rs 125 from last year) and Rs 145 for the early variety. ISMA maintains that the domestic sugar sector is passing through a bad phase and the companies do not have the capacity to pay this much. It says that since crude oil prices were low, other major sugar-producing nations, especially Brazil, would produce more sugar than ethanol which would result in a glut in the international market.