Sugar mills in India’s top cane-producing region have offered higher prices to growers, raising the hopes that protesting farmers would start selling cane helping shares of sugar companies rise.
The Uttar Pradesh sugar mills have agreed to pay Rs 25 a quintal as incentive to farmers over and above the state advised price (SAP) of Rs 165-170. Farmers in the country’s second biggest sugar producing state had been demanding a price of Rs 280 a quintal. Given the current realization of Rs 3,200-3,300 a quintal in sugar, mills will make decent profits even after paying Rs 190-195 for every quintal of sugarcane.
“After discussing the issue with cane societies, we decided to offer Rs 190 a quintal for the common variety and Rs 195 for the early variety. 47 mills are crushing cane today in western UP against 39 mills a year earlier,” C B Patodia, president of the UP Sugar Mills Association and advisor to the Birla Group of Sugar Companies said. However, the cane farmers’ leaders are unrelenting on the issue and have demanded that UP millers pay at least on a par with the neighbouring states such as Haryana and Uttarakhand.
“The cane millers in these two states are paying between Rs 210-220 a quintal. We have been demanding the cane price of Rs 280 a quintal, but at least the price level being paid in Haryana and Uttarakhand for cane should be offered,” Bharatiya Kisan Union (BKU) spokesperson Rakesh Tikait told Business Standard.
He informed BKU was on with its ‘Lucknow march’ programme on December 1 to press for better cane price.
“We will congregate in Lucknow on December 1 and press for a meeting with UP chief minister Mayawati on the issue,” he asserted.
Earlier this month, the mills had offered to pay Rs 180-185 a quintal while the farmers insisted on Rs 280. All through, farmers withheld supplies, delaying the crushing season in the state which normally starts after Diwali in late-October.
Subsequently, the row boiled into a major controversy, with political parties joining the issue, forcing the Centre to call an all-party-meeting to discuss the pricing issue among other things. The beginning of crushing may bring some cheer on the wheat front as farmers would now harvest the cane crop and vacate the field for the sowing of the food grain crop.
Stormy protests by farmers had disrupted parliament last week and delayed cane crushing in the northern Uttar Pradesh state, which could have further squeezed supplies in the world’s biggest consumer of the sweetener.
Sugar scarcity in India, which imported 5 million tonnes in 2009-10, has helped New York sugar futures rise the highest in nearly three decades. Shares of sugar firms such as Bajaj Hindusthan, Oudh Sugar, Dhampur Sugars, Triveni Industries, Balrampur Chini and Simbhaoli Sugars were up 3-5 per cent at 0830 GMT, outperforming the benchmark index that was up 0.5 per cent.
Last week, thousands of farmers protested against low state-set sugarcane price and forced adjournment on the first day of parliament. Growers have threatened another protest in the state capital of Uttar Pradesh from November 26, if their demand for higher price was not resolved.
India, the world’s top sugar consumer, faces a big shortage of the sweetener as the cane crop contracts for a second year, after farmers switched to better-paying crops last year and then the weakest monsoon in 37 years hit the crop this year.