New Delhi, June 16:

Beleaguered sugar mills, whose realisations are under pressure due to high production costs and the bearish trend in prices, are eagerly looking forward to the ethanol orders from the oil marketing companies.

According to sugar millers, the OMCs have issued letter of intent for about 25 crore litres, however, the purchase orders for the same are yet to be placed.

“The sugar mills are holding on to 55 crore litres of ethanol, which has blocked their cash flows, thereby affecting cane payments to farmers,” said Abinash Verma, Director-General of the Indian Sugar Mills Association.

Further, the sugar mills are keen to supply most of the balance of 50 crore litres for the next season starting October, when the crushing begins. “We have urged the Petroleum Ministry to issue supplementary tenders for the remaining quantity,” Verma said.

The recent decontrol of sugar sales has not helped the industry much as prices have been bearish with millers off-loading stocks to pay the cane dues to farmers.

Global prices also continue to remain bearish on surplus supplies, while the rising imports of cheap sugar from Pakistan and Brazil are affecting the sentiment.

The sugar mills, mainly in North India, have been losing about Rs 4-5 per kg as prices are hovering at Rs 30-31 a kg, while the cost of production is estimated at around Rs 35-36 a kg.

The all-India cane payments due to farmers still exceed Rs 11,000 crore, industry sources said.