Cane farmers end protest, sugar mills to gain

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Cane farmers in Uttar Pradesh have called off their stir after sugar mills promised higher prices, an influential farmers' leader said on Thursday, paving the way for large-scale crushing.

Cane growers in Uttar Pradesh, which produces half of the country's cane, had been on warpath for almost a month demanding higher price for their produce, forcing all of the 150 mills in the state to delay crushing.

Late crushing raised fears of further supply squeeze when India, the world's biggest consumer and second-biggest producer, contracted imports of more than 5 million tonnes, helping New York-traded raw sugar climb 28-year high in September.

"Crushing has started at many places. Farmers have mostly agreed to higher prices offered by sugar companies," Ajit Singh, an influential farmers' leader and former federal farm minister, told Reuters.

Millers in Uttar Pradesh on Wednesday agreed to pay 190-195 rupees ($4.10)-($4.21) per 100 kg for cane, 5.6 percent above their previous offer and 15 percent more than what the local government mandated.

The central government, seeking to balance the demands of farmers and millers, had proposed a lower price, but it caved in after stormy protests that disrupted parliament last week.

Later, sugar mills themselves volunteered to pay a higher price to end the impasse.

Lower cane output, the result of a glut in the past two years, clipped the country's sugar output to 14.7 million tonnes in the year to September, 43 percent down from a year ago.

In their bid to secure supplies of cane, which is in short supply, mills would have to offer more. Although farmers have started selling cane, they were unhappy with the price offered by mills, Singh said.

Another farmers' leader said only a third of the state's mills have begun crushing as agitations continued in the western parts of state.

Of the 150 mills in the state, 91 are privately owned and they account for the majority of the state's sugar output.

"Any price below 215 rupees per 100 kg is not acceptable to us," said Anil Singh, national secretary of the National Alliance of Farmers' Association.

Agitating cane growers, who demanded further rise in cane prices, blocked one of the highways and damaged a few vehicles, Raju Babu, additional superintendent of police at Muzaffarnagar district, said.