Agri Business

UP sugar mills seek financial aid from State Govt to pay arrears to growers

Our Bureau New Delhi | Updated on February 16, 2021

Sugar mills in Uttar Pradesh have asked the State government to extend financial help to the industry as relatively low sugar recovery, increase in diesel prices and higher carryforward stock have made sugar production unviable, affecting their ability to pay farmers.

The UP government is yet to announce the State-Advised Price for sugarcane for the current sugar season (October 2020-September 2021) and mills continue to pay the rate of ₹315 per quintal fixed earlier.

In a statement issued on Tuesday, the UP Sugar Mills Association (UPSMA) said lengthy crushing season this year as well as adverse climatic conditions have resulted in lower recovery of sugar. Quoting experts, it said the final recovery could be lower by at least 0.5 per cent by the end of the season. This could push up the cost of sugar production by around ₹150 per quintal compared with the previous season, it said.

Fuel costs

Similarly, the increase in diesel prices have pushed the transportation cost of sugarcane. Almost 50 per cent of sugarcane is transported by the mills themselves and the Transport Rebate, as applicable, covers less than 50 per cent of the total cost incurred, the UPSMA statement said. It also said the per capita consumption of sugar was greatly impacted due to the Covid-19.

As a result of this, the mills still have huge quantities of unsold sugar, impacting the market price.

The mills drew attention to recommendations of a sub-committee of Union Cabinet headed by Home Minister Amit Shah which suggested a minimum selling price of ₹33 per kg. The recommendations of the sub-committee are yet to be implemented though that price too is not enough for the sugar mills to meet their cane price obligations, it said.

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Published on February 16, 2021
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