Indian sugar mills association

Pvt sugar factories in AP say no to cane price hike

Date:	20 Dec 2011

Source:	The Business Line

Reporter:	KV Kurmanath

News ID:	779

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Hyderabad, Dec. 19: Hopes of sugarcane farmers in Andhra Pradesh have been dashed. They will have to be content with last year`s cane price of Rs 2,100 or just Rs 100 more for a tonne of cane. Representatives of private sugar factories have reportedly told the Government that they could not give more than Rs 2,100-2,200 for this crushing season.

“We have met the Sugar Minister, Dr J Geeta Reddy, and conveyed her about our position,” a SISMA (South India Sugar Mills Association) representative told Business Line.

Responding to demands from farmers` associations, the Government had recently asked the private factories to share revenues with the farmers and increase cane price to at least Rs 2,500. The managements of factories had taken two weeks` time to respond. “Most (private) factories can give only Rs 2,100-2,200. Parry`s could be an exception by paying about Rs 2,350,” industry sources said.

Twenty-five of the 36 functional factories in the State are in the private sector. Three factories are in joint ventures and eight in the cooperative sector. The average cane price in the State was Rs 1,996 in 2010-11. This was after excluding reimbursement of purchase tax of Rs 60. Poor payments by cooperatives, which were as low as Rs 1,700, had dragged down the average. In all, they paid Rs 2,058 crore for cane last year.

At the heart of the whole issue is the price of sugar. They argued that average ex-factory sugar selling price in that year was Rs 2,600 a quintal as against the cost of production of Rs 2,950 a quintal.

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