As the fear of sugarcane playing a crucial role in next lok sabha election looms large state Government has issued recovery certificates against five sugar mills drawing sharp reaction from the sugar mills association saying the mills are in no position to clear cane dues. In his letter to the Cane Commissioner, Secretary Uttar Pradesh Sugar Mills Association Deepak Guptara (rpt Guptara) said the sugar mill industry in UP is passing through grave financial crisis and is in no position to clear the dues.
"The cane price of Rs. 280 per quintal has increased our cost of production of sugar to around Rs 3600 per quintal. Besides this the continuously falling sugar prices have now reached a level of Rs. 3000 per quintal and the Industry is expected to suffer a loss of Rs. 4500 Crore for sugar season 2012 - 13," Guptara said in his letter. He said the continuous losses have resulted in cane price arrears which currently stand at Rs. 2851 Crore despite best efforts of the Industry to clear the same. "To add to our problems the Banks have placed the Sugar Industry in the Negative list. Thus, making it difficult for the industry to get any further support from the banks," he said. He however said that the mills could pay at the rate of Rs 240 per quintal and the additional cost should be waived off.
The total arrear stands at Rs 2851 crore of which Rs 2680 crore is of the private sector and the remaining of the state- run mills. The total due was Rs 22643 crore of which Rs 19612 crore has been paid - which stands at 87 per cent. "The private mills are in no position to clear the dues. The state operative cane price is so high that mills find it difficult to pay the money, spokesman of the Uttar Pradesh Sugar Mills Association said He said the private mills have cleared Rs 17857 crore which is 83 per cent of the total arrear. It is the limit. We will clear the rest of the due as and when the mills have money.
Recently a delegation of the UP Sugar Mills Association met state chief secretary Jawed Usmani and demanded an interest free loan of Rs 2000 crore to clear the dues of the cane farmers. The delegation apprised the Chief Secretary of the problem sugar industry was facing due to high State Advisory Price (SAP) announced by the UP government.
The Private mill owners claim that they are suffering a loss of Rs 4 per kilogram of sugar produced in the state as the cane price has been hiked by 70 per cent in the past 3 years while the price of sugar just rose by just 11 per cent. Meanwhile in the current sugar season 121 mills including 98 in the private sector crushed 8126.06 lakh quintal of cane to produce 746.63 lakh quintal of sugar at a recovery of 9.19 per cent. In the last crushing season, 124 mills of the state produced 697.38 lakh quintal of sugar by crushing 7695.90 lakh quintal of cane with a recovery of 9.07 per cent..