The Hindu Business Line : `Policy change unlikely in UP sugar sector'

How does the shift in power affect Uttar Pradesh's biggest industry, sugar? It has been languishing for some time. So, is the new government in Lucknow going to take any firm steps?

As per investment advisor Mr S.P. Tulsian, there won't be any significant changes happening in the policy with regards to revision in State Advised Price (SAP) or payment of cane prices by the new UP Government, at least till the Presidential elections. Excerpts from CNBC-TV18's exclusive interview with Mr S.P. Tulsian.

We spoke to a couple of sugar manufacturers, who said that if they were allowed to pay the sugarcane costs in instalments, it would significantly increase the breakeven time. Do you share the same opinion?

I don't see any significant changes happening in the policy with regards to the revision in SAP or in regards to the payment of cane prices to the farmer.

The season is coming to an end on May 31 and because of bumper crops, the season got extended; otherwise it ends in the last week of April. There has been a hue and cry from the sugar mills, but the new government has taken position just recently and the farmers party with them; so, I don't see any changes taking place.

I have watched the upward movements in the sugar stocks and I think this is sentimental. It has nothing to do with the fundamental or policy changes likely to happen in the industry for UP State.

Sugar is potentially the largest industry in the UP. Will the Mayawati magic work there?

As I said, for this season, which expires by the end of May, I don't think so. Already the SAP has been announced and the Mayawati Government cannot do anything.

The new government's call probably would be to fix up or revise SAP on the downward side in the month of November, looking at the sugar prices, but I don't see anything happening for the next six months. If any sops or relief for the industry has to come, it has to come from the Centre, in the form of subsidy or support price, or building up buffer stock, etc. Nothing remains in the hands of, or at the level of the UP Government.

Do you think she can take the case forward to the Centre on behalf of the manufacturers in regards to the export subsidy and thereby have some positive repercussions on the companies?

There are clashes between the interests of the farmers and the mill owners. If she is pleading any case of granting any relief to the sugar mill, then that is already on the agenda of the Centre. I don't think she will have the priority of putting up the case of sugar mills because it will take a while for her to take charge of the affairs and probably the cause of sugar mill owners.

But there has been Maharashtra state, which has been able to incur sops. Do you think UP in future could follow suit?

They are totally different scenarios; the Maharashtra sugar industry is controlled by the co-operatives where the future of the whole political parties is linked with the sugar industry. In UP, the industry is totally controlled by the private mill owners, because here the ruling party has vested interests to keep the industry running and see that it does not become sick or the farmers don't suffer. In Maharashtra, the sugar mills and farmers are virtually controlled by the ruling party, while the same is not the case for UP.

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