UP sugarcane dues mount to Rs 950 cr

The sugarcane dues in the ongoing crushing season have mounted to over Rs 950 crore in Uttar Pradesh (UP), even as the season has virtually rounded off.

The defaulting mills include private and cane federation mills. Against the total dues standing at Rs 12,987 crore, the mills have paid Rs 12,029 crore so far.

State Cane Commissioner Kamran Rizvi has convened a meeting early next week over the issue. The dues include both the defaulted amount and that payable within the stipulated 14 days of the delivery of cane to mills’ gate.

“The government is confident the mills would clear their dues by the end of this month, since 15 per cent interest and 10 per cent additional recovery charges would be levied on the outstanding amount, which is hefty,” a senior cane department official told Business Standard.

Meanwhile, most of the 125-odd sugar mills, which had participated in crushing, have closed with just five still crushing. “The remaining mills would also close by next week and the total sugar production in UP would be below 5.9 million tonne (mt),” he informed.

Last season, the state sugar production stood at 5.2 mt. Sugar industry is the largest organised industry in UP — the highest cane yielding state in India and second-largest sugar producer after Maharashtra. The annual sugar consumption in UP alone stands at five mt.

Till date, about 64.2 mt of cane has been crushed in UP producing 58.6 mt of sugar with a recovery percentage of 9.2.

Increasing cane payments has been a major factor for incremental acreage over the last couple of years.

Interestingly, sugar production was pegged at much higher levels of up to 6.5 mt by the industry.

Last year, although cane acreage and production figures were much lower, the farmers were paid much higher. The total payout to farmers was around Rs 13,000 crore due to higher cane prices hovering around Rs 250 per quintal due to spurt in sugar retail prices.

This year, the consolidated payment levels are low, since farmers have been paid Rs 205-210 per quintal.

Meanwhile, Kisan Jagrati Manch President Sudhir Panwar alleged the industry had pegged higher sugar production figures to blunt cane price sentiment among farmers.

He blamed poor yield of 58.8 tonne/hectare in UP and a low recovery for lower sugar production.

“This year, 4.2 million cane farmers in UP are at a loss. They have received less payment compared to last year despite increased acreage and input cost,” he said. Adding, the diversion to Khandsari unit was about 20 per cent, while it reduced to almost half during 2010-11.

“Enthused with last year’s prices, farmers had brought more area under cane plantation and the acreage increased 18 per cent to 2.1 million hectares from 1.79 million hectares,” he said. Sugarcane production had been estimated at 120 mt.

UP has raised state advised price of cane by Rs 40 to Rs 205-210 per quintal this season.