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Centre blinks, removes changes in cane order
Posted by :
maximindiaIn my opinion d new policy favours mills.Now they wl pay SAP OF Rs 165-175 against demand of Rs 280 by farmers.Again now govt wl b forced to pay levy price on SAP basis and not on FMP basis as per Supreme court order.So sugar stocks wl jump when d real picture is dawn on all.This is how politicians play their game fooling public.They hv also spread d news that imported sugar wl cost Rs 45-50/kg thereby allowing mills to raise price....
Centre blinks, removes changes in cane order
Posted by :
cmet
BS has reported as follows:
To mollify political rivals and farmer lobbies, the Centre today swiftly moved to “remove the misgivings” in the Sugarcane (Control) Order, making it clear that the difference between the fair and remunerative price (FRP) and state-advised price (SAP) would have to be paid by the mills and not by state governments.
At an all-party meeting, Finance Minister Pranab Mukherjee said Section 3 (B) of the Order would be scrapped. The Centre would also change the preamble of the proposed Bill (which will replace the Ordinance) to relieve states from any financial burden arising out of higher SAP.
“It was not the intention of the food ministry to dump the additional burden of higher SAP on states. But the language of the Ordinance created some confusion. It will be changed to make it clear that even if the states declare higher prices for sugarcane, the mills will have to pay the additional amount,” said Mukherjee.
The Centre will continue to fix the price of the levy sugar on the basis of its FRP. The new Bill replacing the Ordinance is likely to be brought on Monday, sources in the prime minister’s office said.
Earlier, the government was planning to call an all-party meeting next week over this issue. But Prime Minister Manmohan Singh wanted to see the issue resolved before he left for the US on Saturday. The United Progressive Alliance (UPA) managers hurriedly convened the meeting this afternoon where all parties supported Centre’s new proposal.
“It is strange phenomenon that the government should have to pay Rs 14,000 crore to the mills. So, the Centre decided to bring in the Ordinance. But, now, we will have to make some changes to the Sugarcane (Control) Order to bring clarity in the whole issue,” Law Minister Veerappa Moily told reporters after the all-party meeting. “UPA wishes to reaffirm it has always been guided by the principles that the interest of farmers is paramount. In taking this decision also, UPA has kept the interest of farmers as paramount,” the statement said after the all-party meeting.
The Left parties and the BJP, however, raised apprehensions in the meeting that the Centre’s fresh move would resolve the problem only for the time being. “As the Centre says it will buy levy sugar on the basis of FRP, the mill owners might again go to the court and create problems,” CPI(M) leader in the Lok Sabha, Basudeb Acharia, said. While mills were not sure whether the decision to continue fixing a uniform levy sugar price can be challenged after the new changes, they are certainly upset about it. “We have been robbed off of our rightful claims,” said a top Uttar Pradesh miller.
In the meeting, the finance minister mooted the new proposal. Food Minister Sharad Pawar also briefly explained the reasons behind bringing the Ordinance. The meeting was attended by all major political parties. Rashtriya Lok Dal (RLD) leader Ajit Singh, who played a crucial role in unifying the Opposition parties against the Ordinance, was also present in the meeting.
The new Ordinance, promulgated last month, introduced FRP as a uniform price at which mills will procure sugarcane. Besides introducing FRP, the new Ordinance now required state governments to pay the difference over and above FRP.
It is back to square one for sugar manufacturers. The Centre and State Govt will force them to pay higher prices to the growers thus squeezing their margins. Sugar Shares look to be in for a slide in prices, the higher sugar prices notwithstanding.
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Assume a Rs 32 as a price, assume 140 FRP or 145 FRP how many hundreds of crore you make then?
Posted by : maximindiaSo finally at is d victory of mills.Now they wl pay Rs175/qunt as SAP instead of Rs280 demanded by farmers.So everybody can c how politicians pocketed money and fooled farmers.All sugar stocks wl zoom on monday/tuesday when real picture wl emerge....
Assume a Rs 32 as a price, assume 140 FRP or 145 FRP how many hundreds of crore you make then?
Posted by : chchchm.thanabal, It is all politics. Congress & NCP sensing the sensitivity and Rahul`s interests in UP, thrown the ball in the court of State Govts. (including UP, a large sugarcane producing State). But, Mayawati will stand up to the challenge. She also may appease the farmers given that that the UP State coffers is in her hands. Similar will be the case of other State Governments who would not like to lose the vote-bank of farmers. One can see how bigger the hole in States budgets widen....
Assume a Rs 32 as a price, assume 140 FRP or 145 FRP how many hundreds of crore you make then?
Posted by :
m.thanabal
The government plans to end the logjam on sugar pricing by scrapping clause 3(B) of the Sugarcane Control Order, 1966, which makes it mandatory for the state governments to bear the difference between the fair and remunerative price (FRP) and the State Advisory Price (SAP).
SP Tulsian says post the repealing of clause 3(B) profits of sugar companies would shrink by Rs 3 per kg this season.
Despite all this, he adds that sugar companies will make a profit of Rs 4 per kg on a rack rate of Rs 33 per kg.
To put things in perspective, Uttar Pradesh, India`s second-largest sugar producer, has announced a SAP of Rs 165 per quintal. However, farmers are demanding a price of Rs 210 per quintal.
The Centre`s fair and remunerative price stands at Rs 130 per kg. Earlier, the Rs 35 difference between the FRP (Rs 130) and SAP (Rs 165) was paid by the state government. The difference (Rs 45) between SAP (Rs 165) and the current price (Rs 210) was borne by mill owners, if paid at that price.
The government now wants mill owners to bear the entire difference (Rs 80). Tulsian feels this is a practical solution which would help end the impasse. ...
SAP may be modified to favour farmers
Posted by : maximindiaLet all politicians go to field and raise cane so that they can unite and ask Rs 1000/qntl price 4 cane.They r not bothered about sugar price bcs cane farmers r their votebank....
SAP may be modified to favour farmers
Posted by : cmet
BS reports today that theLok Sabha was adjourned following Opposition protests regarding SAP.
The Manmohan Singh government is trying to find a middle path in the impasse over the recent sugarcane pricing Ordinance that created an uproar inside and outside Parliament today. According to top sources in the United Progressive Alliance (UPA), the government may rework the Sugarcane (Control) Order to relieve the states` burden and appease a united Opposition that claims to have the power to defeat the Bill in the Upper House. The shift in the government`s stand came after a meeting between Prime Minister Manmohan Singh and Congress General Secretary Rahul Gandhi this morning.
“Rahul Gandhi met the PM to convey the sentiments of the sugarcane growers in UP. The PM has assured him that the government will look into the matter again and said if it was in the interest of farmers the Ordinance would be suitably amended,” senior Congress leader Digvijay Singh said.
The government will call an informal breakfast meeting with leading political parties on Monday and is likely to call an all-party meeting to resolve this issue later next week.
The new ordinance, promulgated last month, introduced a fair and remunerative price (FRP) as a uniform price at which mills will procure sugarcane. Before this, the states — mainly Uttar Pradesh and a few others — announced a procurement price (the SAP or state-advised price) over and above the Centre-advised price which the mills had to pay. The new ordinance now requires state governments to pay the difference over and above the FRP.
After the Lok Sabha was adjourned this morning following protests from the Opposition and UPA supporters like the Samajwadi Party, Prime Minister Manmohan Singh held a long meeting with Food Minister Sharad Pawar, Finance Minister Pranab Mukherjee, Home Minister P Chidambaram, Law Minister Veerappa Moily and others.
A senior UPA minister said many questions were raised during the PM’s meeting and legal clarifications sought. “Since this is a year of low sugarcane output, mills are already paying prices much higher than FRP and SAP. So the situation doesn’t warrant the implementation of FRP. But if sugar prices fall in the coming years, the government may face trouble,” he said.
Earlier this month, Pawar had said, “The FRP is just a guideline and mills cannot pay a price lower than this. However, we expect mills to pay more than the FRP since sugar realisation is Rs 3,000 a quintal.”
Representatives from the farmers’ lobby also met government officials. They have reportedly brushed aside the food ministry’s arguments and claimed those legal arguments don’t hold water. Pawar later held a meeting with law ministry officials. The opposition parties also indicated they are ready to support the government to offset the Rs 14,000 crore burden to the sugar mills but would not accept any dilution of the SAP. The Rs 14,000 crore obligation is a result of litigation by SAP-paying sugar mills, especially in Uttar Pradesh.
“We told the government we are ready to support any mechanism required to wash away the Rs 14,000-crore burden that has arisen due to court orders on levy sugar. But the government can’t make the SAP irrelevant,” BJP’s deputy leader of Lok Sabha Sushma Swaraj said after the Business Advisory Committee meeting of the Lok Sabha this evening.
Sugar companies in UP are therefore facing selling pressures and are all down today. Once again Politics takes an upper hand in this industry.
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Assume a Rs 32 as a price, assume 140 FRP or 145 FRP how many hundreds of crore you make then?
Posted by :
aaishashafeektodays fall is a knee jerk reaction, anyway companies pay much more than SAP / FRp to the farmers , sugar price being a sensitive issue for the GOvt. there will be many such intermittent falls during next 2 yrs. but withstanding all these all sugar companies will definitely hit life time highs, simply b`coz sugar prices will be high, bajaj hindustan above 550, balrampur above 250. renuka above 500. pick any , it won`t make much of a difference. ...
Assume a Rs 32 as a price, assume 140 FRP or 145 FRP how many hundreds of crore you make then?
Posted by : abhaytiwLOOK WHAT HAPPEN.......
BALRAMPUR CHINI
Posted by : GuestDon`t split what your tongue says. Mind your words before posting such message. ...
Balrampur bound to Reap MORE profits
Posted by : GuestVah dost ! Ekdam satik vishleshan hai. But, u have forgotten that the UP govt has also increased the power-rate, produced by co-gen in the mill by abt 30%, which will add to its profits handsomely. More than what u may think. It is bound to take its share price to Rs 175 level. Let us join the co and reap the benefits for us also !...
BALRAMPUR CHINI
Posted by : maximindiaNo sugar stock wl hv free fall.ALL wl have a higher bottom everyday....
BALRAMPUR CHINI
Posted by : insight95inHigher level resistance are 144-146, down side below 139 further weakness and free fall on the card. Weekly Trend Decider 142...
sugarcane price standoff
Posted by : cmet
The matter of FRP is getting highly politicised and Business Standard today has this report on this issue:
The six month-old second United Progressive Alliance (UPA) government may suffer a major loss of face in the upcoming winter session of the Parliament as it stands against an united Opposition over the sugarcane pricing ordinance issued last month.
The ruling coalition doesn`t enjoy a clean majority in the Rajya Sabha and may trip in the Upper House as the Opposition parties claim unity against the ordinance that seeks to burden the state governments with the additional expenses if it announces higher State Advised Price (SAP) for sugarcane than the Centre`s Fair and Remunerative Price (FRP).
There are currently 263 members in the Rajya Sabha, and at least 138 MPs are likely to oppose the bill. These numbers also include parties like the Samajwadi Party (SP) and Lalu Prasad`s RJD. These parties are providing outside support to the second UPA but, at the same time, have publicly denounced the ordinance.
"We will not sit quiet if the sugarcane mill owners start to decide the fate of farmers. We have had discussions and have chalked out a strategy on the issue," SP General Secretary Amar Singh had said recently. The BJP and the Left parties — with 67 MPs between them — have also decided to vote against the ordinance when it comes as a Bill in the Parliament.
An ordinance is valid for a maximum of six months. It has to be passed in both the Houses of the Parliament to become an Act, failing which, the ordinance will lapse.
Sharad Pawar`s food ministry managed to pass the ordinance in the Cabinet last month, even as a section of the Congress remained apprehensive about its future. The ordinance is expected to discourage states like Uttar Pradesh and Tamil Nadu from declaring a SAP for sugarcane as the new order requires state governments to pay the difference over and above the sugarcane price announced by the Centre. Leading companies like Bajaj Hindusthan and Balrampur Chini, among others, who pay SAP, stand to gain from the consequent level-playing field with companies that operate in states of Maharashtra and Karnataka.
While exercising powers under the Essential Commodities Act, 1955, the government introduced an ordinance to amend the Sugarcane (Control) Order, 1966 to replace the statutory minimum price (SMP) with an FRP which will be fixed by the government from time to time.
Uttar Pradesh, Uttarakhand, Punjab, Haryana and Tamil Nadu are five states which declare SAP. This is different from the SMP which is declared by the Union government. Other major sugarcane producing states like Maharashtra, Karnataka, Andhra Pradesh and Bihar follow the SMP.
Political parties are everready to jump on to the bandwagon of any issue that will give them mileage. It seems that no-one is bothered with the real issues of the cane producer, the sugar mill and the general consumer in the end.
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Entry level price for Balrampur chini with target
Posted by : nareshkrjainCan someone advise the entry level price for Balrampurchini with next target level. I can hold for short term...
