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Sugar mills pay more cane, shares up

Sugar mills pay more cane, shares up
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First Published: Wed, Nov 25 2009. 03 07 PM IST
Updated: Wed, Nov 25 2009. 03 08 PM IST
New Delhi / Lucknow: Sugar mills in India’s top cane-producing region have offered higher prices to growers, raising hopes that protesting farmers would start selling cane and helping shares of sugar companies rise.
Stormy protests by farmers had disrupted Parliament last week and delayed cane crushing in the Uttar Pradesh, which can further squeeze supplies in the world’s biggest consumer of the sweetener.
Sugar scarcity in India, which imported 5 million tonnes in 2008/09 and is likely to buy a similar amount in the current year, has helped New York sugar futures rise the highest in nearly three decades.
Millers in Uttar Pradesh have agreed to pay Rs190-195 rupees per 100kg for cane, 5.6% above their previous offer and 15% more than what the government mandated.
“We have decided to pay Rs25 as incentive over and above the state-set price,” said Shyamlal Gupta, secretary general of the Uttar Pradesh Sugar Mills Association.
He said 47 sugar mills in the state, out of 91 private mills, have already started crushing. “Almost all mills will start crushing by end of this month,” he said.
Shares of sugar firms such as Bajaj Hindusthan, Oudh Sugar, Dhampur Sugars, Triveni Industries, Balrampur Chini and Simbhaoli Sugars were up 3-5% at 1pm, outperforming the benchmark index that was up 0.5%.
Gupta said millers hoped the offer would end protests by growers but Sudhir Kumar Panwar, the head of farmers’ group Kisan Jagriti Manch said farmers deserved more.
“This hike is short of reality and expectations,” Panwar said, who has demanded at least Rs215.
Union agriculture minister Sharad Pawar met rival political parties on Wednesday to discuss the demands of cane growers, and farmers and government officials said talks were likely to continue.
“We hope the government would accept our demands,” Ajit Singh, leader of Rashtriya Lok Dal who is leading protesting farmers, told reporters after the meeting.
Last week, thousands of farmers protested against low state-set sugarcane price and forced adjournment on the first day of Parliament.
Growers have threatened another protest in Lucknow from 26 November, if their demand for higher price was not resolved.
India, the world’s top sugar consumer, faces a big shortage of the sweetener as the cane crop contracts for a second year, after farmers switched to better-paying crops last year and then the weakest monsoon in 37 years hit the crop this year.
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First Published: Wed, Nov 25 2009. 03 07 PM IST