Punjab Government on Tuesday decided to raise cane price by Rsfive per quintal for crushing season of 2014-15, even as the private sugarmill owners were asking the State Government not to go ahead with the price hike.
With cane crushing set to start from November 20, Punjab Government has raised the State Agreed Price (SAP) of early, medium and late varieties of sugarcane by Rsfive per quintal. The decision to raise cane prices was taken by Chief Minister Parkash Singh Badal on Tuesday. Significantly, the State Government had raised cane prices substantially by Rs40 per quintal during the last crushing season. With this hike, the SAP of early, medium and late varieties of sugarcane in Punjab would now be Rs295, Rs285 and Rs280 per quintal respectively for the crushing season of 2014-15.
During previous crushing season, the cane prices in Punjab were Rs290, Rs280 and Rs275 per quintal respectively.Notably, Punjab-based private sugar mills had asked the State Government not to raise SAP of sugarcane for 2014-15 crushing season, saying that low sugar prices hit the industry hard. Sugar mill owners had pointed that there was no “viability” in running sugar mills as there were very high rates of cane in the State while current sugar prices were lesser than input cost.
Mill owners, under the banner of Punjab Private Sugar Mills Association, had rued that the State Government had raised cane prices substantially by Rs40 per quintal last year, which had led to financial loss of Rs30 crore to Rs50 crore per sugar mill.
Private sugar mills owners had said that industry’s input cost from producing sugar was Rs3,600 per quintal but the wholesale sugar prices were ruling at Rs3,200 a quintal. They had also sought rollback of purchase tax on cane in Punjab.A total of one lakh hectares of area is under sugarcane in Punjab, with cane production and sugar estimated to be 720 lakh quintals and 48 lakh quintals respectively for 2014-15 crushing season.
There are 16 sugar mills, including seven in private sector in Punjab, with crushing capacity of 49,766 tonnes crushing per day.