“Cane arrear of Rs 20,159 crore may come down faster after government measures”


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New Delhi, Mar 6 (PTI) Sugarcane arrear, which has peaked to Rs 20,159 crore so far, is likely to come down “faster” after recent government measures like hike in minimum selling price of sugar and Rs 10,000 crore soft loans to mills, according to industry body ISMA.

The Indian Sugar Mills Association (ISMA), however, said fixing of higher sugar quota of 2.45 million tonnes for sale for the current month has brought down the sugar rate by Rs 1 per kg and this will “adversely impact the millers and negate some of the good steps taken by the government recently.”

Mills owe Rs 20,159 crore to sugarcane growers as on February 22 of this year.

“Such huge cane price arrears have not been recorded in the past in the month of February in any year. However, with the government deciding to give soft loans of over Rs 10,000 crore to mills and increasing the minimum ex–mill price to Rs 31 per kg, the arrears may get reduced faster,” the ISMA said in a statement.

Mills have not been able to make payment to cane growers due to liquidity crisis following surplus production that led to fall in prices of sugar.

The government has taken several measures in the last one and half years to address the surplus output and protect both the millers and farmers.

According to ISMA, mills have offered to supply around 51 crore litres of ethanol produced from B-Heavy Molasses and sugarcane juice for the first time.

Till February-end, about 12 crore litres of ethanol have been supplied which has helped to bring down sugar production by 1,00,000 tonnes in the current marketing year, that started from October 2018.

Sharing the production update, ISMA said mills have manufactured 24.76 million tonnes of sugar during October-February period of the 2018-19 marketing year.

Sugar production in Maharashtra, the country’s leading producing state, rose to 9.21 million tonne from 8.45 million tonnes a year-ago, while the output in Uttar Pradesh, the second largest producer, was slightly lower at 7.32 million tonnes from 7.36 million tonne in the year-ago period.

Sugar output in Karnataka, the country’s third biggest producer, increased to 4.16 million tonnes till February from 3.39 million tonnes.

ISMA has pegged the country’s overall sugar output at 30.7 million tonnes for this marketing year (October-September), lower than 32.5 million tonnes during 2017-18, but still higher than the domestic requirement.

As many as 466 mills were in operation till February-end across the country. Mills have started closing in Maharashtra and Karnataka, it said.

India is the second largest sugar producer after Brazil. Its annual consumption is around 26 MT.

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