Ahead of 2020-21 sugarcane crushing season, 37 mills in Maharashtra already facing liquidity crunch

Pune: As many as 37 sugar mills from Maharashtra, all from cooperative sector are already facing the heat of financial problems and won’t get loan from banks to start next (2020-21) crushing season. Maharashtra State Co-operative Sugar Factories Federation Chairman Jaiprakash Dandegaonkar has requested NABARD to help these mills to raise finance by restructuring their loans.

Banks grant loans to the sugar mills on the basis of Net Disposable Resource (NDR). Total 37 cooperative mills have negative NDR and will not be able to raise fresh loans from banks. Urging the NABARD President G R Chintala, Dandegaonkar stated that “The Coronavirus pandemic has affected the financial situation of the mills and the bank must come forward to assist mills. The mills should start operations next season which expects bumper crop.”

“The mills were unable to sell their existing sugar stocks due to lock down imposed amid Covid-19 threat which has hit their capacity to raise stock. The Central Government has asked banks to grant 10% more working capital to these mills. The private and public sector banks have extended support to private mills however none of Cooperative Banks have extended such support to sugar mills.” he said.

Chintala has agreed to look into the matter in details and assured a solution over the issue.

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