Sugar mills in Uttar Pradesh are planning to move the Supreme Court after the Allahabad high court turned down their petition against the cane price fixed by the state government.
The state government in October raised price for general sugar quality cane to Rs140 per quintal for the current sugar year (October '08-September '09) from Rs125 the previous year.
Private sugar mills in UP, represented by the Indian Sugar Mills Association (ISMA) challenged the state advised price (SAP) before the high court, terming the rate as 'arbitrary'.
The SAP did not consider the 'losses' suffered by the sugar industry in the past two years. The mills said they were willing to pay around Rs112 a quintal. The Allahabad high court also had refused to grant any interim order staying the SAP.
Sugar mills in UP have already started crushing and have to pay between Rs140 and Rs145 per quintal for sugarcane purchases.
As per the court order, the mills will have to pay Rs140 a quintal for the general variety, Rs145 for the early variety and Rs137.50 per quintal for the rejected variety of cane.
Sugarcane farmers, however, refute the claims of sugar mills. The balance-sheets of various mills presented before the HC show the mills had posted good profits during the last few years and some have even expanded their crushing units, they point out.
Sugar prices are currently ruling over Rs18 a kg, despite the slump, against last year's price of Rs13-14 a kg, farmers said.