Faced with a huge unsold stock of sugar and the nagging cane payment crisis, the Uttar Pradesh government has urged the Centre to double the monthly sugar sale quota of state sugar mills to over 11 lakh metric tons (MT).
Cane Commissioner Sanjay Bhoosreddy has sent a letter to Union Food Secretary to increase sugar sale quota to a little over 11 lakh MT to facilitate speedier liquidation of stocks and payouts to farmers.
He contended that UP sugar mills had a carryover stock of more than 26 lakh MT from the 2017-18 crushing season, when the state had produced over 1.20 crore MT sugar.
During the current season, UP sugar mills are expected to produce nearly 1.25 crore MT of sugar by April next year.
“Of this, the export quota is estimated at 10.75 lakh MT. Consequently, net availability of sugar with state mills is expected to be around 13.60 lakh MT. Hence, the state would require monthly sugar sale quota of 11.33 lakh MT to clear stocks,” Bhoosreddy wrote.
Between June and November, 2018, the effective monthly sale quota varied between 40,000 MT to 8.06 lakh MT, much below the actual requirement, which compounded the crisis.
The state also demanded higher ex-factory floor price of sugar at Rs 3250 per quintal against the present price of Rs 2,900 per quintal, claiming that Kanpur-based National Sugar Institute (NSI) had computed average sugar production cost of UP mills at Rs 3,400 per quintal.
Bhoosreddy claimed that bulk consumers accounted for 65 per cent of consumption and an increase in price would not pinch the actual consumers much. But it would ensure prompt payment to farmers, maintain financial health of sugar industry and promote allied industries, he added.
Meanwhile, Bhoosreddy has ordered for filing FIRs under Section 3/7 of Essential Commodities Act against seven private sugar mills at Malakpur, Walterganj, Bisauli, Brijnathpur, Gagalheri, Bulandshahr and Gadaura.
Earlier, FIR was lodged against sugar mills at Malakpur and Modinagar (Modi Group) and Brijnathpur and Simbhawali (Simbhawali Group) for cane arrears and under-weighing in 2017-18 crushing season.
Besides, recovery certificates (RCs) have been issued against nine sugar mills with highest cane outstanding at Malakpur, Walterganj, Modinagar, Bisauli, Brijnathpur, Gagalheri , Bulandshahr, Chilwaria and Gadaura.
The recovery certificate empowers respective district magistrates to seize movable and immovable assets of sugar mills to recover arrears through auction.
Currently, more than Rs 2,200 crore cane arrears is outstanding on private mills against the total Rs 35,400 crore worth of cane sold to 119 sugar mills during 2017-18.