The Hindu Business Line : TN fixes sugarcane price at Rs 222.50/tonne

Comparative figures
In 2006-07, mills must pay a minimum of Rs 1,025 a tonne for cane linked to a sugar recovery of 9 per cent.
In 2005-06, it was fixed at Rs 1,014 with an incentive of Rs 8.80 a tonne for every 0.1 percentage point over 9 per cent recovery.

Chennai , Nov. 28

Sugar mills in Tamil Nadu will have to shell out a minimum of Rs 1,025 a tonne for sugarcane linked to a sugar recovery of 9 per cent for the 2006-07 season.

According to an official press release, the State Government has fixed a sugarcane State Advised Price (SAP) of Rs 222.50 a tonne linked to 9 per cent in addition to the Statutory Minimum Price of Rs 802.50 a tonne linked to 9 per cent recovery announced by the Centre. In addition, there is an incentive price of Rs 9 a tonne for sugar recovery of every 0.1 percentage point over 9 per cent.

In effect, mills will now have to pay farmers over Rs 1,150-1,200 a tonne based on the recoveries.

However, according to industry sources, the private sugar mills are awaiting the State Government's detailed notification on whether the sugarcane price would apply to the private sector.

It is routine that the 19 cooperative and public sector sugar mills pay the SAP announced by the State Government. However, due to legal technicalities the private sector mills have remained outside the purview of the SAP and have preferred to go in for direct negotiations with the farmers in recent years, say industry sources.

The 2005-06 season was an exception, when following buoyant sugar prices and sufficient cane availability for the first time after successive periods of drought, the mills paid the SAP.

It was then fixed at Rs 1,014 with an incentive of Rs 8.80 a tonne for every 0.1 percentage point over 9 per cent recovery. Based on the sugar recovery, the price per tonne ranged between Rs 1,014 and Rs 1,128 for each mill in 2005-06.

Sugar mill sources pointed out that the announcement this year comes at a time when prices are dampened by reports of a bumper production for the 2006-07 season and uncertainty on prospects for exports.

Cane output

According to Government estimates, sugarcane production in Tamil Nadu during 2006-07 is estimated at about 225 lakh tonnes with a sugar production of 24.5 lakh tonnes. Private sugar mills peg sugarcane production at about 250 lakh tonnes. The opening stock according to official estimates is about 6.5 lakh tonnes of sugar as on September 30.

More Stories on : Agricultural Policy | Sugar | Tamil Nadu

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TN fixes sugarcane price at Rs 222.50/tonne