NEW DELHI (Reuters) - India's biggest sugar producing state, Uttar Pradesh, will keep prices that mills must pay to cane growers on hold in the current season, a senior government official told Reuters on Saturday.

In India, the world's biggest sugar consumer, the federal government fixes the price that cane growers receive each year, but Uttar Pradesh's state government typically raises them in a bid to appease farmers, stoking discontent among sugar mills.

The state government this year decided to keep the prices unchanged as any increase further would have damaged the financial health of the loss-making mills, said a senior state official who declined to be named in line with government policy.

For the season that ended on Sept. 30, Uttar Pradesh fixed the cane price at 315 rupees ($4.52) per 100 kilogram.

(Reporting by Mayank Bhardwaj, editing by Louise Heavens)

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