UP sugar mills move court over cane SAP

Uttar Pradesh sugar mills today challenged the recently-announced state-advised price (SAP) for sugarcane in the Allahabad High Court.

The SAP for this year, announced on October 18, was hiked by a record Rs 15 per quintal over last year.

For the 2008-09 crushing season, the state government has announced a SAP of Rs 137.50 per quintal for the rejected variety, Rs 140 for the general variety (up from last year’s Rs 125) and Rs 145 for the early variety.

Almost all major sugar producers and sugar mill associations have jointly challenged the SAP and the matter is likely to come up for hearing on November 6, sources say.

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

Earlier, the Uttar Pradesh Sugarcane Federation had filed caveat applications in the Supreme Court as well as in the Allahabad HC and its Lucknow Bench to defend the SAP.

Indian Sugar Mills Association Secretary CB Patodia had told Business Standard that the sugar sector was passing through a bad phase and the companies did not have the capacity to pay this much.

He said the sugar industry was not against higher prices to cane farmers but the government should provide subsidy of at least Rs 15 per quintal to the sugar mills to help them cover the “losses”.