Sugar crisis: UP mill owners likely to meet Akhilesh Yadav again tomorrow

The UP sugar mill owners will once again meet chief minister Akhilesh Yadav to resolve the stand-off between the government and the sugar industry.

Sources told CNBC-TV18’s Shereen Bhan that the mill owners will meet the CM on Tuesday after having a meeting with him earlier on Sunday, which failed to see any sort of a resolution.

The Western UP sugar mills are required to start crushing between November 20 and 25. But most sugar mills in the state have announced their inability to do so on account of sharp increase in cane prices by the state.

[caption id=“attachment_931519” align=“alignleft” width=“380”]  Indian mills and traders mainly import raw sugar and sell it in the local market after refining. India has been importing sugar despite a surplus local production as the sweetener is cheaper in the world market due to a bumper sugar output in Brazil.[/caption]

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Meanwhile, the Uttar Pradesh government has decided to keep FY14 sugarcane state advised price (SAP) unchanged at Rs 280 per quintal. The move came after the informal meeting of key UPA ministers, to discuss relief measures for sugar mills, ended without any decision.

Private millers had termed the prevailing price as high and “unviable” saying the mills will not be able to pay SAP - the minimum rate at which mills buy cane from farmers - of more than Rs 225 per quintal this year as sugar prices are lower.

On 22 November, Chief minister Akhilesh Yadav said his government wanted to ensure that neither the millers nor the growers faced any problems.

The government is trying to strike a balance under which sugar mills are run and the farmers also get the right price for their produce", Yadav said in response to a question after a function held here to inaugurate radio taxi service in 13 cities. “The cane growers would never want that sugar mills are closed down and the government would not like that farmers faced any kind of problem,” Yadav said adding that talks were on with millers

In an interview to CNBC-TV18 Subhash Chandra Sharma, UP Cane Commissioner said if the private sugar mills do not start their crushing then government will have to take a decision on next course of action.

Although the cost of sugarcane production has gone up, the SAP fixed by the state government is quite reasonable, said Sharma. Moreover, the state government has also given a rebate of Rs 2/quintal on purchase tax.