UP sugarcane arrears start to pile for FY14

Against the total dues of Rs 328 cr on cooperative and private sugar mills, Rs 137 cr has been cleared

Even as the sugarcane crushing in Uttar Pradesh assumes full steam, arrears are piling up for the current 2013-14 season as well.

Against the total dues of about Rs 328 crore on cooperative and private sugar mills, they have so far cleared Rs 137 crore, leaving Rs 151 crore as net arrears.

The cane arrears of Rs  2,022 crore are still pending on private sugar mills pertaining to the 2012-13 season.

Despite the Allahabad High Court order and tough posturing by the Akhilesh Yadav government regarding settlement of dues, the arrears are still to be cleared by private mills. However, the mills have paid settled nearly Rs 300 crore in arrears for 2012-13.

Meanwhile, about 118 sugar mills have already started crushing operations but only a couple of private and cooperative units off the block. The mills have collectively produced 7.5 million quintals of sugar by crushing nearly 86.5 million quintals of cane.

The recovery percentage has also improved considerably to 8.7 compared with 7.75 per cent about two weeks earlier. It is likely to further improve in the weeks to come.

UP accounts for a third of India’s sugar output and the state is the largest sugarcane producer. The state sugar sector is pegged at Rs 35,000 crore.

The impasse over cane price between private mills and the UP government had delayed the crushing season, imperiling the fortunes of four million cane farmers.

The delay not only blocked cash flow, but also prevented farmers from sowing wheat, which required vacant field.

Later, the matter was resolved after millers agreed to pay the state-advised price of Rs 280 per quintal over sops by the state government.

The millers have been allowed to pay in installments of Rs 260 and Rs 20 a quintal and the government has conceded to incur cane societies’ commission on behalf of mills.

The Akhilesh Yadav government had made a provision of Rs 126 crore for the payment of commission in the recent state supplementary budget.