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News
Sugar units want ex-mill price hiked to clear Rs.20,000-cr dues
Date:
05 Feb 2019
Source:
The Hindu Business Line
Reporter:
HBL Bureau
News ID:
35941
Pdf:
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Sugarcane arrears touched ₹20,000 crore by the end of January as production of the sweetener gained pace in the first four months of the 2018-19 sugar season, exceeding 18.51 million tonnes, according to the Indian Sugar Mills Association (ISMA), the apex body of millers.
Sugar production was up by around 8 per cent till end January as against 17.1 million tonnes in the same year-ago period.
Hike sought
As the cane arrears begin to rise, the ISMA has asked the Centre to increase the ex-mill price to ₹35-36 per kilo, so that the industry recovers its production costs, pays farmers’ dues and also services debts and other obligatory payments. “Considering the pace of crushing in the remaining three peak months of the current 2018-19 sugar season, and if the current average all India domestic ex-mill price remains at around ₹29-30 per kilo, millers might not be able to clear the dues on time... it is feared that it may further increase to very uncomfortable levels by the end of April 2019,” ISMA said in a statement. The ex-mill sugar prices across the country are ruling in the range of ₹29-30 per kilo, about ₹5 to 6 per kilo below the cost of production of sugar.
Sources said the cane arrears in Uttar Pradesh till end January were estimated to be around ₹9,300 crore, while in Maharashtra, the dues are at ₹4,850 crore and in Karnataka, at over ₹3,500 crore.
Further, ISMA said sugar exports are also not happening at the desired pace. “Several sugar mills are either not voluntarily willing to export sugar against their allocated export quotas or do not find it viable enough to do so. Therefore, in order to ensure that all mills fulfil their allocated export quotas, ISMA has requested that the Government should enforce the quotas,” the statement said.
Early start
Sugar production is higher, so far in the current season, because mills started crushing earlier this year than in the previous season. “Considering the trend of yields, recoveries and drawal of sugarcane as also diversion of some ‘B’ heavy molasses to ethanol, sugar production this year is estimated to be around 30.7 mt. This will be 5-6 per cent less than the sugar production of about 32.5 mt in the previous season,” ISMA said.
In Maharashtra, output till end January was 7.07 mt, compared with 6.3 mt in the corresponding period last year. About 191 sugar mills are operating in the current season as against 182 in the year-ago period. Similarly, in Karnataka, sugar production was higher at 3.33 mt as against 2.67 mt in the same period last year.
However in UP, sugar production dipped to 5.33 mt till end January from 5.39 mt. About 117 sugar mills are in operation this year as against 119 in the corresponding period last year. Sugar output in Tamil Nadu stood at 3.10 lakh tonnes as compared to 2.12 lakh tonnes in the year-ago period.
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