Cane growers want higher price, say cultivation costs have gone up

With the start of the new sugar season, cane growers across the country have stepped up their demand for a higher price, citing increase in cultivation costs.

On the other side, sugar millers, who said they were reeling under the impact of last year’s high cane costs amidst bearish sugar prices, have expressed their inability to pay higher than Rs 2,400 a tonne.

Cane arrears at the start of new season are around Rs 3,500 crore, most of it accumulated by millers in Uttar Pradesh (around Rs 2,500 crore), the largest cane-producing State.

In the new sugar season 2013-14, which began on October 1, over half-a-dozen factories in Southern Karnataka – mainly in Mysore and Mandya districts - have begun crushing operations.

“We are demanding a uniform price across Karnataka and the mills should pay ex-factory price of at least Rs 3,000 a tonne, excluding harvesting and transportation costs,” said Kurubur Shantkumar, Convenor of the recently formed All-India Sugarcane Growers Association.

Moreover, cane prices should be linked to sugar recovery, he added.

Karnataka has taken the lead over other major cane-growing States of Uttar Pradesh and Maharashtra in enacting a legislation and setting up a Sugar Control Board in line with the Rangarajan Committee recommendations to fix the cane price based on sugar and other allied product prices.

However, the process of fixing the cane price for the Karnataka Sugar Control Board has not been smooth so far.

The Board has asked millers to make an advance payment of Rs 2,400 a tonne, same as last year, he said.

A final call on the pricing would be taken after October 15, said Shantkumar, who is a special invitee on the Board.

However, M. Srinivasan, President, Indian Sugar Mills Association (ISMA), said the mills would not be able to pay more than Rs 2,400 a tonne, citing weak sugar prices that had affected the realisations.

Also, sugar prices are likely to remain bearish on high opening stocks of about 8.6 million tonnes, about 20 per cent more than the normative opening balance at the start crushing season.

Sugar production is pegged at 25 mt for the current season ahead of domestic consumption of around 23 mt. In Uttar Pradesh, millers, who said they had been facing the impact of rising cane prices over the past three to four years have expressed their inability to pay not more than Rs 2,400 a tonne.

In the past four years, cane price fixed by the UP Government has seen an increase of around 70 per cent from Rs 165 a quintal in 2009-10 to Rs 280 in 2012-13.

“We want the UP Government to fix the cane price at Rs 310-320 a quintal,” said V.M.Singh, Convenor of Rashtriya Kisan Mazdoor Sanghatan, stating that production costs had gone up on rising fertiliser and diesel prices.

“Despite the start of new season, the UP Government has not even started the process of fixing the cane price” he said.

Neighbouring Haryana has fixed the price at Rs 301 a quintal, an increase of Rs 25 a quintal over last year.

“If Haryana can increase the price, why can’t the UP Government” Singh asked.

“In Maharashtra, we are seeking a price of Rs 3,200 a tonne,” said farmer leader, Raju Shetty.

The mills had made an initial payment of Rs 2,600 a tonne last year.

While the process of finalising the last year’s payment is on with majority of the mills, some of them have paid Rs 150-200 a tonne as final instalment, he added.

> Vishwanath.kulkarni@thehindu.co.in

COMMENT NOW