Tuesday, February 15, 2011

Falling sugar prices Bane of govt mills

With the falling sugar prices and high state advised price (SAP), sugar mills in Uttarakhand have run into losses this season despite good recovery.

While losses in the private sector are not alarming, the six government-controlled sugar mills are expecting huge losses this year. “We are expecting our losses this year to be around Rs 50 crore this year, mainly due to the falling prices of sugar in the market and high SAP,” said a government official.

The accumulated losses in the government sugar mills have also gone up to Rs 435 crore, the official added.

However, owing to the smart recovery this season and better management skills, the situation in private sugar mills is not that bad. “If we are not making profit, we are not running into losses either,” said an official of the Laksar-based Rai Bahadu Narain Singh Sugar mills Ltd. The official claimed the sugar recovery this season was around nine per cent. Similarly, other private sugar mills are also not expecting any heavy losses this year.

Meanwhile, expectations are high that sugar prices may recover in April which in turn will help the mills to curtail their losses. “We are expecting the sugar price to be above Rs 30 per kg during April-May,” the official said.

Significantly, sugar mills are not finding the high SAP a difficult proposition. The government this season had announced the SAP at Rs 210-215 which is considered to be the highest in the country.

Due to the high price, the sugar mills are not paying any bonus this year. Last year, the mills had paid hefty bonuses to farmers following which farmers got cane price around Rs 250-270. Most of the private sugar mills have cleared their dues to farmers as well.

BS

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