Few months back, private sugar mills in Uttar Pradesh the country's second biggest producer threated not to open their mills in the current 2014-15 season (October-September) till the state government links cane prices with sugar rates.

Mills were forced to issue suspension notice as they suffered huge losses during last season on account of high cane prices fixed by the state and lower realisation from sugar sales.

"There is no way that UP sugar mills will remain shut for long. My reading is that all mills will run. But they may start 10-15 days late," Food Secretary Sudhir Kumar said.

Kumar said that mills do not have any option but to run their mills as they cannot shift to other business, while farmers can easily shift to some other crops.

However, the Secretary clarified that this is the matter between the state government and UP millers, and the Centre does not have much role to play.

On likely impact on the country's sugar production due to delay in crushing operation in UP, he said, "It is too early to say. Let the crushing begin. We will assess it at the end of the season."

Meanwhile, Indian Sugar Mills Association (ISMA) Director General Avinash Verma said: "UP sugar mills have taken one step forward and have agreed to start maintenance activity which should take 40-45 days."

"However, they would wait for a mechanism or a policy that determines sugarcane price in relation to revenue generation before start of the crushing operations, so that they are in a position to pay cane price on time," he said.

The UP sugar industry has shown confidence in the state government that a rational cane price formula would be announced and the industry would pray that the state should not fix the cane price, he added.

Crushing operation in western UP normally begins from October 15 and five days later in other parts the state.

According to industry estimates, sugarcane arrears in Uttar Pradesh have come down to Rs 2,400 crore now from Rs 7,500 crore at the end of March this year.

Sugar production for this season is pegged at 25-25.5 million tonnes, against 24.3 million tonnes last year.

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