Despite chief minister Mayawati?s election bonanza to the farmers in the form of a high cane price that is payable to them from sugar factories and an excellent sugarcane crop that is necessary for a good sugar season, sugar crushing in Uttar Pradesh is sluggish with factories reluctant tostart operations in full flow.
Talking to FE, an official of the cane development department said as many as 45 sugar mills had already started operations, out of which 35 are in western UP and the rest are in central UP.
The reason for the lukewarm start to the new crushing season stems mainly from the fact that the industry is largely unhappy with the UP government?s decision to hike the state advised price (SAP) by R40 per tonne and they have, in fact, written to the state government expressing their anguish over the matter and have also approached the Allahabad High Court for a relief.
?For us to pay this kind of cane price and run our factories is out of the question, especially when we know we will not be able to make payment for the cane purchased at this price. And if we do not make the payments on time, there would be administrative pressures on us. While on the one hand we are being forced to start factories even though we feel that the time is still not right to start crushing as the recoveries are very low ,? said a miller.
In fact, many millers who have started operations, claim that they have been bull-dozed into beginning operations by the local administration and the only option for them is to keep on crushing but at very low levels. ?Most of the mills are running at less than 30% capacity, mainly because they feel that crushing too much cane will put the burden of making the cane payments within the mandatory 14 days, which will be suicidal for the industry,? said another miller.
The industry is pushing for exports so that it can help revive the domestic sugar prices, and in the process help the millers to close the year with lesser losses and also enable it to pay the declared price to the farmers, on the other hand, farmers, pleased with this price regime, will opt for sowing cane next year.