Do not increase SAP, UP sugar mills urge CM Yogi Adityanath

By: |
November 25, 2020 8:55 AM

UPSMA seeks `15/quintal subsidy to compensate for expected increase in production cost

Producing ethanol will not only help stabilise price due to diversion of sugar, but also ease fair and remunerative price (FRP) payments to farmers, he said.Millers fear that the worrisome trend will impact the cost of production in the range of Rs 1.25 to Rs 2 per quintal. (Representational image)

Concerned about the drop in sugar recovery in the current season and the resultant impact on the cost of sugar production, the Uttar Pradesh Sugar Millers Association (UPSMA) has written to chief minister Yogi Adityanath on Monday, requesting him not to increase the state advised price (SAP) on the commodity in the current season.

According to data gathered from sugar mills across various regions of the state, the recovery is lower in the range of 0.50% to 0.80% in different factories and with the advancement of the season, the gap in daily recovery is on the rise compared to the last season. Millers fear that the worrisome trend will impact the cost of production in the range of Rs 1.25 to Rs 2 per quintal.

According to data gathered from sugar mills across various regions of the state, the recovery is lower in the range of 0.50% to 0.80% in different factories and with the advancement of the season, the gap in daily recovery is on the rise compared to the last season. Millers fear that the worrisome trend will impact the cost of production in the range of Rs 1.25 to Rs 2 per quintal.

Speaking to FE, Deepak Guptara, secretary general of UPSMA said the UP sugar industry was already reeling under stress due to multiple reasons and if the government increased the SAP, it would be the proverbial last nail.

“India’s carry forward stock continues to be very high in the last three years. The 107-lakh tonne inventory at the beginning of this crushing season is technically blocking Rs 35,000 crore of funds and with another bumper production expected this year, it will further block working capital,” he said, adding that the sugar export policy for 2020-21 had also been delayed, due to which exports would be lower this year.

sugar producer, it needs to export regularly to offload the excess production,but in that too, we face challenges as the high cane prices render the domestic sugar industry uncompetitive. The industry has to continuously remain dependent on government subsidies to export,” he said, adding that with export subsidies not possible after 2023 following WTO guidelines, India needed to urgently reform its cane pricing policy if it had to stay globally relevant.

According to statistics provided by UPSMA,while Brazilian sugarcane prices were the lowest at $20.09/tonne in 2019-20, followed by Thailand at $23.57/tonne and Australian $23.91/tonne, Indian sugarcane cost a whopping $42.5/tonne.

Apart from high cane prices, the industry in UP has also cited low sugar MSP, non-payment of Rs 900 crore cogen dues by UPPCL, sugar export subsidy claims of Rs 3,000 crore, 18% levy on molasses for the liquo rindustry and a reduction of RS 2 per unit in power tariffs by the UPERC as other reasons for its perilous condition.

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