Defying a State Government directive, more than two-thirds of the 99 private sugar mills in Uttar Pradesh have issued a suspension notice, expressing their inability to start crushing for the 2013-14 season in the absence of a viable pricing policy.
About 65 private mills, including Bajaj Hindustan, Balrampur Chini Mills, Dhampur Sugar Mills and DCM Shriram Consolidated Ltd, submitted the suspension notice to the UP Cane Commissioner in Lucknow on Tuesday.
Last week, Chief Minister Akhilesh Yadav had directed mill owners to end delays and start crushing by the end of this month.
“Left with no other option and for reasons beyond our control, we are constrained to give notice of suspension of operations at our sugar units,” the notice said.
“Every crushing season you can’t be forced to incur losses,” said Vivek Saraogi, Managing Director of Balrampur Chini Mills“If you don’t have money to fill petrol in your car, how will you run it?”
Double whammy
Amid the bearish trend in sugar prices, millers in Uttar Pradesh are reeling under the impact of the high cane price announced last year.
While the Mayawati-led BSP Government had set the price at Rs 280 a quintal last year, farmers are demanding Rs 320/quintal for the current year, citing rising production costs.
With sugar prices declining further, mills say they can only pay Rs 225 a quintal this season against the earlier price of Rs 240. The sugar mills, which are yet to clear last year’s estimated dues of Rs 2,400 crore to farmers, are said to have incurred losses of about Rs 4,000 crore.
They continue to demand that the price of cane be linked to the product price, in line with the recommendation of the Rangarajan Committee.
“We cannot start operations till viability is assured,” said Ajit Shriram, Deputy Managing Director of DCM Shriram Consolidated Ltd.
Reacting to the mills’ latest stance, Sudhir Panwar, President of Kisan Jagriti Manch, said: “They have made it clear that they will not succumb to pressure. There is no other option left … the Government has to intervene.”