Factories in Uttar Pradesh have begun purchasing cane, signalling the start of new sugar season even though the State Government has not yet come out with the order that earmarks the cane area for each factory or announced the State Advised Price (SAP) for sugarcane for the new season.
Last year, the sugar mills had started crushing in the second week of November. Full-scale crushing season in UP would begin by the first week of November when all the mills in the State would commence operations.
Modi Sugar Mills in Modi Nagar started purchasing cane on Friday at out-centres located beyond their factory gate, sources said. The company has begun purchasing in 60 of the 70 centres and started crushing from Sunday. Simbhaoli Sugars Ltd plans to start crushing on October 28 at two of its factories in western UP. The factory in Simbhaoli has a crushing capacity of 9,500 tonnes a day, whereas Brijnathpur has 4,000 tonnes a day.
The industry is, however, apprehensive of the SAP to be announced by the UP Government, where Assembly elections are scheduled for April-May 2012.
On Friday, the UP Government discussed cane pricing with both growers and millers in Lucknow.
The sugarcane growers in the State are demanding a price of between Rs 250 and Rs 300 a quintal. However, the industry has expressed its inability to pay such a huge increase, that too in a bumper crop year where prices are seen stable at current levels, sources at the Indian Sugar Mills Association (ISMA) said. The UP Government is likely to announce the SAP later this week.
For 2010-11 sugar season, the UP Government had increased the SAP by Rs 40 a quintal to Rs 205 for normal cane delivered at the factory gates. For the early varieties, the SAP was fixed at Rs 210 and for rejected varieties, it was pegged at Rs 205 a quintal. The industry expects an increase of Rs 25 a quintal in the SAP for 2011-12 in the range of Rs 230-235 for different varieties.