Sugar mills in Bihar have announced Rs 20-30 per quintal increase in price for sugarcane, notching it up to Rs 280-300 per quintal for the upcoming crushing season. The crushing is expected to start by the end of this month.
The rates were fixed after a series of meeting between the millers and the state government officials. "Despite enormous financial burden over our shoulders, we have accepted the state government's recommendations for a hike to encourage the cane farmers of Bihar," Naresh Bhatt, secretary of Bihar Sugar Mills' Association, told Business Standard. "For the crushing 2016/17 season, millers would pay Rs 280 per quintal for the normal yield variety, up Rs 20 per quintal since last season. Whereas, for premium varieties, farmers will be paid Rs 300 per quintal and that is Rs 30 higher than last season," said the representative. There has been no increase in the price of the low varieties.
This is the biggest hike in the cane prices in Bihar in last few years. After a drought of 4 years, the state has received a normal monsoon this year. Therefore, the millers are expecting a bumper crop this year. According to the millers, they are expecting 6-7 million quintals of cane produced this year. To sweeten the deal for the millers, the state government has decided to waive off the taxes on cane purchases this year, whereas the local taxes have also been heavily slashed. In return, the state government has asked them to buy at least 75% of their purchases from their command areas.
After a lull of more than one and half decades, the recovery rate - the amount of sugar in cane - has also shown tremendous improvement in the state. "Last year, the recovery rare touched a new high of 9.63%, which is highest in last 16 years. This year, we are expecting it to touch 9.85 per cent," said Bhatt. High recovery rate means the higher production of sugar. Therefore, the millers in Bihar expect that the sugar production might touch a new record 6.25 lakh tonne in the upcoming crushing season.