Ram Gopal Yadav

Large sugar mills in Uttar Pradesh have decided to begin crushing in October this year, almost a month ahead of schedule, to boost supply of the sweetener and control shifting of cane supply to jaggery and khandsari units. The commencement of crushing in October is set to benefit the mills, the government, and consumers alike, as it would help control shifting of cane supply to jaggery and khandsari units (kolhus), especially in western UP. In absence of procurement of sugarcane from the mills, small and marginal farmers in UP supply their produce to kolhu to fetch instant cash. With early start, the mills start generating early revenues also.

Cooperative sector sugar mills across the country have stated that the impact of the stock limit will dampen the cooperative sugar sector. The National Federation of Cooperative Sugar Factories (NFCSF) has expressed concern that the decision to impose stock limits is likely to result in dropping the ex-mill realization below the current levels of Rs 3,650 per quintal in addition to GST and this may adversely affect the timely cane payment to farmers across the country. The food ministry has imposed limits on stocks sugar mills can hold during September and October, in a bid to discourage hoarding and curb any potential price rise during the festival season.

Prices of sugar fell in the key wholesale market of Kolhapur, as implementation of a stockholding limit on mills dampened sentiment. As the stock limits are going to come into effect, mills are quoting lower prices to offload their stocks.

Sugar mills in Uttar Pradesh owed around 18.34 billion rupees to cane farmers as of Tuesday for the season that started Oct 1. So far in 2016-17 (Oct-Sep), mills have paid cane farmers 235.53 billion rupees, out of the total amount of 253.87 billion rupees owed this year. Mills across Uttar Pradesh also owed 3.28 billion rupees as interest on arrears to be paid to sugarcane farmers as of Tuesday. Sugar mills in Uttar Pradesh have collectively paid 99.9% of the total dues worth 206.46 billion rupees for 2014-15, while some private mills are yet to clear arrears of 270.30 million rupees for the year.