The country's sugar production has increased by 14.27 per cent to 27.37 million tonnes till April of the 2014-15 marketing year, industry body ISMA said on Friday while demanding the government to buy surplus sugar to help cash-starved mills clear cane arrears worth Rs 21,000 crore. Sugar production in Maharashtra, the country's leading producer, has touched an all-time high of 10.35 million tonnes in the said period, Indian Sugar Mills Association (ISMA) said in a statement.

 

Overall sugar output is likely to reach 28 million tonnes in the current marketing year (October-September) with sugar surplus of 3.5 million tonnes by end of the year, it added. "The government should immediately purchase at least 3 million tonnes of sugar from the industry, which will give instant funds of about Rs 8,000 crore to the industry, which in turn, can be used for payments of farmers, and improve the massively depressed sugar prices," ISMA President Vellayan said.

 

Steps like the recent decision to hike import duty on sugar to 40 per cent and removal of excise duty on ethanol are not helpful in improving the depressed domestic prices in the short run and will also not improve their paying capacity to clear the cane price arrears of Rs 21,000 crore, he said. Vellayan said surplus stock in domestic and global markets have depressed sugar prices both in the global and domestic market. As a result, sugar mills are finding it difficult to dispose off their sugar. Cash flow of mills has not yet improved as they were able to export only 1,94,000 tonnes of raw sugar and 1,63,000 tonnes of white sugar. "Despite announcement of export incentive on raw sugar, sugar mills could export only about 1,50,000 tonnes of sugar in two months under the export 

incentive scheme," ISMA said.