Once the most promising sector in Uttar Pradesh, the sugar industry is facing rough weather this season due to high State Administered Price (SAP) and the plummeting price of sugar in the market. Besides, the sugar glut has added to their woes. Against the production of 85 lakh tonnes of sugar last year the expected production this season is around 100 lakh tonnes bringing down the rates in the domestic market from Rs 1,700 per quintal in 2005-2006 to Rs 1,300 per quintal in 2006-2007.

While the state Government has issued directives to start the crushing season this year from first week of November, the mill owners have opposed the move till new SAP is announced. Meanwhile, the current stock has to be offloaded before the crushing season begins. With sugar prices dipping, the Uttar Pradesh Sugar Millers Association (UPSMA) have made it clear to they would be unable to pay the price of cane to farmers at the present SAP.

The UPSMA in a letter to the chief minister has asked the state Government to lower SAP than the present one. S L Gupta, secretary of UPSMA told The Indian Express with sugar price in the domestic market pegged at Rs 12.50 to Rs 13 per kg the mill owners would not be able to pay more than Rs 76 per quintal for cane to the farmers.

Last year, the state Government had announced the SAP of sugar cane at Rs 125 per quintal while the Union Government put the rate at Rs 81.18 per quintal. Gupta pointed out the sugar mills could not start crushing unless SAP is announced at the present rate of Rs 125 which would result in losses.

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