Image Credits: Telegraph
To arrest the nose diving sugar prices, industry has requested the government not to control the sale and prices of this essential commodity. Sugar Industry has submitted a letter pleading for the same to Food processing ministry. Sighting its concerns industry has asked the government to fix the sugar cane prices based on the prices of sugar and its allied byproduct and not on the basis of FRP.
Considering the 3.6 Cr tons of stock and expected domestic consumption of 2.5 Cr. tons, sugar industry is facing sever crisis. According to an industry analyst, there is an urgent need to restore the cash flow and it can be only done through sale. Industry has updated the officials of Food ministry about the issues, problems and crisis encountered by the sugar mills. Industry hopes that government will create the buffer stock, provide incentive to export and fix the minimum base price for the commodity. While industry as whole is concerned with huge carry over stock, the sugar mills are burdened with due owed to farmers and huge piled up stock with no warehousing infrastructure to store the commodity.
While sugar mills are paying 90 – 100 per cent of its revenue to sugarcane farmers. To distress the sugar mills it should be brought down to 70 percent of the revenue. Industry is expecting that government should issue directives to farmers to not to cultivate more sugarcane, and in case of more sugar cane cultivation price cut should be allowed, and for payment, Gujarat model should be adopted.It allows the mills to pay the amount to the farmers in three installments. This will help the industry to cope with present scenario and revive its operations.