Amid the expected increase in the State Advisory Price (SAP) of sugarcane for 2024-25 season, the UP Sugar Mills Association (UPSMA) has raised concerns about a decline in sugar recovery, which would lead to higher production costs.
In a letter to UP Chief Secretary Manoj Kumar Singh, the association highlighted a decline in recovery.
The drop in sugar recovery vs last year has increased substantially to now approx. 0.84% which has significantly pushed up the cost of production.
They also pointed out that sugar prices have remained unchanged, despite an increase in the cane SAP last January. The minimum selling price (MSP) of sugar has not been revised since 2019.
In January 2024, the UP government raised the SAP for all sugarcane varieties by Rs 20 per quintal. The SAP for early maturing varieties went from Rs 350 to Rs 370 per quintal, for common varieties from Rs 340 to Rs 360, and for late maturing varieties from Rs 335 to Rs 355 per quintal.
According to reports, the Uttar Pradesh government may make a decision on the sugarcane price this month. If the prices are increased, it will bring cheer to farmers but may impact sugar millers, who claim to be facing financial hurdles.
Recently, Sugarcane Minister Lakshmi Narayan Choudhary, while speaking to Kisan Tak, stated that a decision regarding sugarcane SAP might be taken in the cabinet meeting whenever it is held in the second week of January. He mentioned that the report from the Sugarcane Research Center and experts has already been received. However, Choudhary refrained from specifying the exact amount by which the price might be increased
Earlier in the assembly, he mentioned that full efforts are being made to ensure farmers receive a fair price for sugarcane, and that this process is currently underway.
The association cites that an extremely low rate of transport rebate being allowed despite much higher increase in freight cost. Further, realization from ethanol (even though it being separate business with investment for same) has not seen any commensurate price rise compared to the sugarcane price increase over the past two years.
Millers in the state feel that a hike in the sugarcane SAP will put financial pressure on them, as they are in no position to afford any increase.
Millers are also urging the government to increase the MSP of sugar. The current MSP of sugar, set at Rs 31 per kg in February 2019, has remained unchanged. However, industry groups have called for an increase due to rising production costs and financial pressures on sugar mills.
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