Sugar industry welcomes verdict

The sugar industry has welcomed the apex court’s decision on sugarcane price in Uttar Pradesh. The industry hopes the order will bring economic rationale in the process of sugarcane pricing by the state government.

“This is a good step in the right direction. The industry’s petition has been upheld for the second consecutive years and it gives a sense that ad-hocism in fixing cane price is gradually coming to an end,” said Vivek Saraogi, managing director, Balrampur Chini Mills, country’s second-largest sugar producer.

At the Bombay Stock Exchange, sugar stocks surged reacting to the decision. Bajaj Hindusthan rose 4.24 per cent to Rs 170.75 while Balrampur Chini gained 5.14 per cent to close at Rs 92.05.

“The government is now expected to follow a rational formula while deciding the sugarcane price. We want to pay a remunerative price to farmers but it should be viable for the mills as well”, said C B Patodia, president, Uttar Pradesh Sugar Mills Association and advisor to Birla Group of sugar companies.

All the companies had made a payment of Rs 110 a quintal to farmers based on an interim decision by the Lucknow Bench of Allahabad High Court last November. They had taken this price while declaring their quarterly results.

This is not for the first year that the Supreme Court has fixed a price that is lower than the state-advised price (SAP).

source:businessstandard