Acting further on its decision to create a buffer stock of 3 million tonnes of sugar to help the sugar industry tide over the glut in production, the Government has provisionally allocated a quota of sugar that could be maintained by different sugar mills in India as buffer stock.
In an order issued on Monday, the Directorate of Sugar and Vegetable Oils under the Department of Food and Public Distribution, announced the quantity of sugar that can be kept as buffer stock by over 500 sugar mills in the India. The authorities have given the mills time till Wednesday to decide whether they want to participate in the scheme as well as to decide whether they would settle for a lesser quantum than that has been tentatively allocated.
According to the order, one of the major conditions that sugar mills need to fulfill to partake in the scheme was to furnish the details of sugar stocks held by them as on May 31. The information needs to be filed by Wednesday, “failing which it would be presumed that the mill is not interested in maintaining the buffer stock”, it said.
According to a notification issued on June 15, the Government plans to hold a buffer stock of 3 million tonnes of sugar for a year from July 2018 and the carrying cost for the same would be borne by the Government. According to the Food and Public Distribution Minister Ram Vilas Paswan, maintaining the buffer stock would cost the exchequer Rs 1,175 crore.
The creation of sugar buffer stocks was among a few measures announced by the Government to bail out the beleaguered sugar industry, which is suffering from overproduction in the current sugar season (October 2017-September 2018).
Sugar production this season is projected to be nearly 32 million tonnes, which is around 50 per cent more than that in the previous season. The glut in production has led to a crash in prices, leading to a liquidity crisis for sugar mills, which in turn has resulted in the accumulation of cane dues to Rs 22,000 crore.