Sugar mills in financial crisis: Uncertainty looms over next crushing season

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Pune: Sugar mills in Maharashtra have completed the cane crushing season 2020-21. However, there are chances of less sugar mills operating in the next season owing to the financial stress.

The Sugar Commissioner of Maharashtra on Thursday announced the conclusion of the crushing season. The mills crushed 1,012 lakh tonne of cane with a recovery rate of 10.50 per cent and produced 106.3 lakh tonnes of sugar. The mills are worried about clearing the stock in the domestic market as the ex-mill sugar prices continue to remain in the range of Rs 31-33 per kg for the last several months.

The mills are under pressure to sell sugar at low prices to maintain the liquidity of funds, according to the Indian Sugar Mill Association (ISMA). They are unable to generate funds to clear the FRP to the cane farmers.

The mills claim that they are not in a position to pay FRP to farmers and if sugar stocks remain in godowns, many mills will not be able to start crushing operations next season.

According to the news report published in thehindubusinessline.com, one of the directors of Sangli based sugar mill said, “The State and the Centre will have to help sugar mills. The Central government must increase the minimum selling price to help mills improve revenue realization. Many mills are not in a position to pay FRP to farmers and if sugar stock remains in godowns, many mills will not be able to start crushing next season.”

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