CNBC-TV18 learns from sources that the UP Sugar Mills Association has written to the UP government that unless cane prices are linked to sugar prices, in line with a formula recommended by the Rangarajan Committee, they would not be able to start their mills in the new season that begins in October.
The battle between Uttar Pradesh government and the state's sugar mill owners is likely to intensify further as the deadline set by the latter for corrective action expired on July 31.
CNBC-TV18 learns from sources that the UP Sugar Mills Association has written to the UP government that unless cane prices are linked to sugar prices, in line with a formula recommended by the Rangarajan Committee, they would not be able to start their mills in the new season that begins in October. Also, the mill owners had asked the state government for further relief of Rs 9 per kg, in the letter dated July 8.
However, none of these demands were addressed. Sources say mill owners, who are saddled with Rs 4,000 crore of losses in FY14, are now considering suspension notices.
The UP government has been holding 3 million tonnes of sugar stock seized from the private millers following the latter's inability to clear sugarcane arrears. According to a Business Standard report , 95 private sugar mills have collectively paid nearly Rs 11,765 crore against the total dues of Rs 17,366 crore for cane purchased during the 2013-14 crushing season; implying settlement of 68 percent of arrears.
UP sugar sector is estimated at Rs 30,000 crore and represents the largest organised industry. Sugarcane farming supports the livelihood of over 4 million Indian farmers.
With the industry making losses, an Economic Times report said, its arrears to sugarcane farmers have risen. "Uttar Pradesh has the highest state-advised cane price of Rs 280 per quintal. Cane arrears in the state have touched Rs 7,000 crore as sugar prices declined and the industry expects it to cross Rs 10,000 crore by the season-end," it said.
The report said cane prices will fall to Rs 235-240 a quintal if the formula recommended by the Rangarajan panel is implemented.
Balrampur Chini stock price
On August 04, 2014, at 14:10 hrs Balrampur Chini Mills was quoting at Rs 73.25, down Rs 1.25, or 1.68 percent. The 52-week high of the share was Rs 88.00 and the 52-week low was Rs 34.60.
The company's trailing 12-month (TTM) EPS was at Rs 0.30 per share as per the quarter ended March 2014. The stock's price-to-earnings (P/E) ratio was 244.17. The latest book value of the company is Rs 49.75 per share. At current value, the price-to-book value of the company is 1.47.
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