UP private mills fall in line after SAP booster

The state cabinet on Wednesday retained sugarcane SAP for 2014-15

A day after the Uttar Pradesh government decided to hold the sugarcane price at last year’s level, private sugar mills on Thursday thanked Chief Minister Akhilesh Yadav “for a pragmatic approach towards issues confronting the industry”.

This came as an uncharacteristic display of bonhomie, especially after months of a stiff standoff between the government and the millers over cane price and running of mills in the current crushing season.

On Wednesday, the state cabinet had decided to not hike cane’s state advised price (SAP) for 2014-15. The effective cane price stands at Rs 275 per quintal, Rs 280 per quintal and Rs 290 per quintal for the unsuitable, common and early varieties of cane, respectively. The last time, when SAP was hiked in Uttar Pradesh was 2012-13, when it was increased by almost 17 per cent for the common variety, which forms the bulk of the cash crop.

While the farmers had been demanding a cane price of Rs 350 per quintal, the mills had claimed they were not in a position to even pay at least year’s level due to a steady fall of sugar prices over the last year and high arrears for the last season. The private mills still have a liability of over Rs 1,800 crore for 2013-14.

The sugar industry had refrained from commenting over the issue on Thursday, claiming they were studying it for its possible repercussions on mills. “UP Sugar Industry notes with pleasure the positive approach of the UP government towards solving various problems before the industry,” UP Sugar Mills’ Association (UPSMA) secretary Deepak Guptara this evening said in a press communiqué here.

The industry even thanked UP sugar department principal secretary Rahul Bhatnagar  for his “untiring efforts towards working out the package”. The association expressed confidence that modalities towards implementation of the package would be clear in due course. “…it shall be the endeavour of the industry to win back the confidence of bankers, which till now was wavering due to concerns of possible NPA.”

However, industry sounded a word of caution saying “concerns remain regarding viability for a majority of sugar mills.” UPSMA hoped to “working closely” with the government, farmers & others for increasing productivity and long term growth. Meanwhile, a couple of mills have started crushing and more units may join.