MUMBAI (Commodity Online): Sugar stocks turn red as the cane growers in Uttar Pradesh plan to launch agitation demanding higher prices for their crop.

Sugar stocks traded weak on the Bombay Stock Exchange (BSE) today. Shree Renuka Sugars Ltd (BOM: 532670) traded in a see-saw movement and traded at Rs.205 with marginal gains of 0.4% in the afternoon trading session.

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Uttam Sugar Mills Ltd traded at Rs.61.05 down by over 2.5% from its previous close, while Dhampur Sugar Mills Ltd (BOM: 500119) lost over 2% at Rs.108 during the day.

Cane growers in Uttar Pradesh are planning to launch an agitation from Thursday, demanding higher prices for their crop to be crushed by sugar mills in the 2009-10 seasons (October-September).

The move could further delay the start of crushing operations for the new season and, in turn, put pressure on already constrained sugar supplies in the market. Moreover, it could affect sowing of wheat to the extent farmers take their own time in vacating their cane fields.

The proposed agitation comes even as the Centre is expected to soon declare its “Fair and Remunerative Price” (FRP) for the 2009-10 cane crop. This would be lower than the Rs.165-170 a quintal State Advised Price (SAP) of the Uttar Pradesh Government.

The farmers are not happy either with SAP or FRP. They have demanded prices to be at Rs.280 per quintal. Mills, on their part, are adopting a wait-and-watch approach as of now.

Earlier, on October 22, the Centre had issued an amendment, exempting mills from paying any price other than the Centre’s FRP. State Governments that have announced SAPs higher than the FRP will be required now to pay the difference from their own budgets, with the mills’ liability restricted to just the FRP.

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