Sugarcane arrears at over Rs 2,500 cr in UP

Of total payables of about Rs 14,816 crore on UP sugar units, the mills have collectively paid Rs 12,237 crore

With sugarcane arrears topping Rs 2,500 crore for the just-concluded 2015-16 crushing season, the Uttar Pradesh government is gearing up to turn   the heat on defaulters, especially those in the private sector. Of the total payables of Rs 14,816 crore, the mills had collectively paid Rs 12,237 crore, or 83 per cent, leaving Rs 2,579 crore as dues.

While some four dozen mills, both standalone and those belonging to big groups, have cleared their entire dues, 52 units have paid less than 90 per cent of the dues.

UP Cane Commissioner Vipin Kumar Dwivedi has summoned the representatives of the defaulting mills for a review meeting on June 1 to issue stern directives to make farmers’ payments without further delay. The sugar sector in UP is dominated by the private sector with 92 units, followed by cooperative mills (24). The UP State Sugar Corporation Limited (UPSSCL) has one unit. While the lone UPSSCL unit had paid its full dues, the collective payment by the 24 cooperative units stands at 89 per cent. The private sector is the laggard with a payment percentage of 82 per cent. However, the actual payment this year has been better than last year’s. Against total sugarcane payment of Rs 10,954 crore during the corresponding period of 2014-15 crushing season, the payments this year stand at Rs 12,237 crore, higher by Rs 1,283 crore.  

This is partly due to higher retail sugar prices this year, stagnant sugarcane prices, better cane recovery percentage of 10.50 per cent.

According to the preliminary estimates by the Indian Sugar Mills Association, the cane area in UP during 2015-16 was 2.3 million hectares. The state is trying to increase cane yield to 70 tonnes per hectare from the current level of 65 tonnes.

This year, UP mills had produced 6.9 million tonnes of sugar, compared to 7.04 mt in 2014-15.