UP mills to pay 5% MORE for cane

This is the third price hike in less than a month; mills will pay Rs 200-205 a quintal.

Sugar mills in Uttar Pradesh (UP) have raised the price of sugarcane for the third time in less than a month and have offered to pay a price of Rs 200-205 a quintal to farmers. This is against the state advised price (SAP) of Rs 165-170 a quintal.

“We have decided to raise the price by Rs 10 a quintal (from Rs 190 a quintal for the common and Rs 195 for the early variety) as farmers are not supplying cane to us and are offering to khandsari and jaggery makers,” UP Sugar Mills Association (UPSMA) president C B Patodia told reporters here.

A number of sugar mills in western UP districts such as Meerut, Muzaffarnagar, Saharanpur were already paying a price of Rs 200-205 a quintal for sugarcane. Since this would have caused a price war among the mills, the UPSMA called a meeting to avoid such a situation.

“We now hope that cane supply (to sugar mills) will improve,” he said, adding that 84 out of 90 private mills in the state started functioning till yesterday. The state has a total of 132 running sugar mills.

Last year mills had paid a SAP of Rs 140-145 a quintal. However, with more than 100 per cent jump in sugar prices due to a 43 per cent drop in production in the year ended September 2009, farmers have been pressing for higher sugarcane prices.

Farmers association in the state led by the likes of Mahendra Singh Tikait and V M Singh have been protesting and seeking a price of Rs 280 a quintal since sugar realisation has moved to a record of Rs 33-34 a kg. In order to appease the farmers, the UPSMA, agreed to pay Rs 25 a quintal as incentive over and above the SAP. However, a number of mills have failed to get adequate sugarcane even after this move.

Sugar production may fall below 16 million tonnes in 2009-10.

Sugar output in India, the world’s second largest producer, may fall short of the earlier estimate of 16 million tonnes in 2009-10 season.

“It may be a little lower than 16 million tonnes,” Indian Sugar Mills Association president Samir Somaiya said when asked about the likely production in the 2009-10 season (October-September). “But it will be higher than the last season (close to 15 million tonnes),” he added.

However, even if sugar output exceeds the last year’s figure, it will still be way short of the country’s annual requirement of about 23 million tonnes.