Mumbai, May 15: The Supreme Court has asked the sugar mills in Uttar Pradesh to pay growers Rs 110 per quintal of cane. This is lower than the Rs 125 per quintal fixed by the state government for the 2007-08 sugarcane season (October-September).

Industry circles said the order would benefit companies such as Bajaj Hindusthan and Balrampur Chini Mills that have large facilities in the state.

Bajaj Hindusthan has 10 plants in Uttar Pradesh with a capacity of 96,000 tonnes sugarcane crushed per day, while Balrampur Chini has nine units in eastern UP.

Sources added that the apex court had asked the mills to pay the arrears within four weeks. Companies in the state have already paid Rs 81.18 per quintal, which is the statutory minimum price fixed by the Centre. The rest of the amount will have to be paid within the time stipulated by the Supreme Court.

“The order is a big relief for companies based in Uttar Pradesh. Our balance sheets would have been affected had we paid Rs 125 per quintal,” said an official of a leading sugar company, who did not wish to be identified.

The order could not have come at a better time for the domestic industry.

Prices have inched up over the last one month because of lower production. Retail prices are now hovering around Rs 19 per kg, up from around Rs 12 per kg in the 2006-07 season.

The court directive had a positive impact on the sugar stocks. On the Bombay Stock Exchange, the Balrampur Chini share closed with a gain of 4.8 per cent at Rs 101.95, while Bajaj Hindusthan shot up 7 per cent to close at Rs 239.25.

The stock prices of Simbhaoli Sugars, Mawana Sugar, Shree Renuka Sugars, Shakthi Sugars, Rana Sugars, Oudh Sugar Mills and Dwarikesh Sugar have risen by 21-36 per cent.