UP sugar mills' arrears touch Rs 5,200 cr

The private and cooperative mills have paid nearly Rs 11,582 cr till March 22

Uttar Pradesh's sugarcane dues on sugar mills have mounted to Rs 5,200 crore.

The sugar mills had bought total cane worth over Rs 19,000 crore from farmers through sugarcane societies. Since the mills get two weeks to settle dues without interest penalty, the net payables stood at Rs 16,838 crore. "The private and cooperative mills have paid nearly Rs 11,582 crore till March 22, with the arrears standing at Rs 5,256 crore," a sugar industry source told Business Standard.

The 2012-13 cane crushing season is underway and is likely to continue through April. The mills have crushed 70 million tonnes (mt) of sugarcane with the recovery percentage at about 9.09 per cent. So far, 6.30 mt of sugar have been produced. All this, despite 18 of the 121 mills having closed.

"There is sufficient availability of cane for the majority of the mills and the units should be operational at least till April end," the source said.

On December 7, 2012, the Akhilesh Yadav government had announced the cane 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 per quintal for the common variety vis-à-vis Rs 240 per 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 per quintal and Rs 275 per quintal compared to Rs 250 per quintal and Rs 235 per quintal respectively.

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

The private millers had opposed the "high" cane price in UP and had expressed apprehension of arrears mounting on them as the crushing season advanced.