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News
Cane farmers hit by cash flow troubles at mills
Date:
18 May 2020
Source:
Live Mint
Reporter:
Sayantan Bera
News ID:
44243
Pdf:
Nlink:
NEW DELHI : Pending payments to sugarcane growers has emerged as an additional factor adversely affecting rural incomes, even as farmers across India are hit by a crash in wholesale prices of fruits and vegetables because of the virus-induced lockdown.
Sugar sales are down because of a crash in institutional demand from confectioners and manufacturers of a wide variety of products such as ice-cream, aerated drinks, and chocolates. In addition, oil companies are procuring lower volumes of ethanol, a by-product of sugar, impacting cash flows of sugar mills.
In Uttar Pradesh, the state which produces the largest amount of sugarcane in India, mills owe farmers ₹14,000 crore. “We are producing more sugar this year since cane, which is normally used by traditional industries such as jaggery and khandsari units, are diverted to mills for crushing," said Deepak Guptara, secretary of the Uttar Pradesh Sugar Mills Association (UPSMA).
Mills in Uttar Pradesh produced 11.65 million tonnes of sugar till the end of April, marginally higher than the 11.28 million tonnes produced last year, according to estimates of the Indian Sugar Mills Association. The sugar season in the country begins in October and continues till September of the following year.
However, overall production in the country is 6.37 million tonnes lower than last year because of lower output in states such as Maharashtra and Karnataka.
Further, sugar sales in March and April were lower by a million tonnes because of the lockdown, according to the trade lobby.
“Sugar demand is expected to increase as soon as the lockdown is withdrawn, especially because of demand from traders to refill the pipeline, which is almost dry, and also because of the increase in demand for beverages, ice creams, and juices with the onset of summer," the Indian Sugar Mills Association said earlier this month.
Mills in Uttar Pradesh have urged the state government to provide a cash subsidy to help the industry pay farmers. Member mills have so far paid 55% of the cane dues to farmers, according to UPSMA.
“The sugar mill near our village started crushing cane from November last year and owes me more than ₹12 lakh," said Jahar Singh, a farmer from Bulandshahr district of Uttar Pradesh.
Singh said he is unable to pay labourers who harvested the crop in full.
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