Sugar output in Andhra may decline to 7.5 lakh mt
Sugar output in Andhra Pradesh is set to halve to 7.5 lakh tonnes this season as against 14.5 lakh tonnes last season, following a drastic fall in cane plantation. The drop could be worrisome for consumers as sugar prices are set to rise.
By Appaji Reddem, ET Bureau |
HYDERABAD: Sugar output in Andhra Pradesh is set to halve to 7.5 lakh tonnes this season as against 14.5 lakh tonnes last season, following a drastic fall in cane plantation. The drop could be worrisome for consumers as sugar prices are set to rise.
Sugar millers are wary as they reckon the non-availability of sugar cane may force them to shut shop. They are, hence, offering a higher price of Rs 1,100 to Rs 1,500 per tonne of cane. Farmers are also being promised a loan of Rs 10,000 per acre on soft terms.
The Centre has fixed a statutory minimum price (SMP) of Rs 811.80 per tonne of cane. Andhra Pradesh does not offer a state advised price (SAP) over and above the SMP. But farmers are compensated through a purchase tax of Rs 65 per tonne that millers pass on to them.
The decline in production will push up sugar prices by at least 12%, said a government official. The price could rise from Rs 16.50 per kg to around Rs 18.50 per kg by March 2009.
The area under sugar cane cultivation has dropped from over 500,000 acres to 300,000 acres this year as a sizeable number of farmers have diversified their cropping to other commercial crops that are profitable.
According to AP Sugar Commissioner K Lakshminarayana, several farmers have opted for other remunerative crops such as paddy, maize and sunflower. The labour costs for harvesting cane have also surged. Besides, he reckons there is no price alignment between sugar and sugarcane in the market.
Farmers��� associations are, however, not happy with the price paid by millers. They say that it is much lower than the cost of cultivation. Added to this is the transport cost that is also borne by farmers here.
Sugar millers are wary as they reckon the non-availability of sugar cane may force them to shut shop. They are, hence, offering a higher price of Rs 1,100 to Rs 1,500 per tonne of cane. Farmers are also being promised a loan of Rs 10,000 per acre on soft terms.
The Centre has fixed a statutory minimum price (SMP) of Rs 811.80 per tonne of cane. Andhra Pradesh does not offer a state advised price (SAP) over and above the SMP. But farmers are compensated through a purchase tax of Rs 65 per tonne that millers pass on to them.
The decline in production will push up sugar prices by at least 12%, said a government official. The price could rise from Rs 16.50 per kg to around Rs 18.50 per kg by March 2009.
The area under sugar cane cultivation has dropped from over 500,000 acres to 300,000 acres this year as a sizeable number of farmers have diversified their cropping to other commercial crops that are profitable.
According to AP Sugar Commissioner K Lakshminarayana, several farmers have opted for other remunerative crops such as paddy, maize and sunflower. The labour costs for harvesting cane have also surged. Besides, he reckons there is no price alignment between sugar and sugarcane in the market.
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Farmers��� associations are, however, not happy with the price paid by millers. They say that it is much lower than the cost of cultivation. Added to this is the transport cost that is also borne by farmers here.
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