Sugar mills in Maharashtra seems to have shed their initial reluctance towards the central loan as figures show 123 mills have applied to banks for availing of the Rs 1,800 crores soft loan. While the loans are in various stages of being approved, the total cane arrears as of August end in the state stood at Rs 2,900 crores with at least 42 lakh tonnes of sugar remaining unsold in stock. On Friday, at least 40 to 50 activists of Hindustan Praja Paksha had tried to vandalise the sugar commissionerate to protest against the delay in payment of cane arrears.
With the sugar season 2015-16 around the corner, the issues of cane arrears and financial health of mills, apart from drought, have put question marks on the viability of the season itself. Sugar prices, which were on the decline for most of the months, have seen a significant rise over the last two months. As of Saturday, the spot price of sugar in mills off Kolhapur was Rs 2,524 per quintal, which is a rise compared to the price of Rs 1,900 in June and early July.
August saw the total sale of 8 lakh tonnes of sugar, which brought down the sugar stock to 42 lakh metric tonnes.
July saw 9 lakh tonnes of sugar being sold, against the average of 6-7 lakh tonnes on an average monthly basis.
Prices of sugar have been buoyed as sugar production is expected to reduce in 2016-16 season due to the reduction in cane area and production loss due to drought.
The central government had announced a soft loan package of Rs 1,800 crores for the state, which the mills initially were wary of accepting. The mills had pointed out that the package was a loan with very stringent norms which had made it non-viable for them. The mills, particularly, were reluctant to stand for personal guarantee which was required for the loan.
Officers of the sugar commissionerate stated that as of Saturday,123 mills have applied for the loans after obtaining the cane due certificates from them. Pramod Karnad, managing director of the Maharashtra State Cooperative Bank (MSCB), said, of the 32 mills affiliated with the bank, eight have applied for the loan. “The process of sanctioning the loans is almost complete and by next week it would be disbursed,” he said.
Activists of Hindustan Praja Paksha, who carried out the vandalism, had tried to blacken the office of the sugar commissioner. A police case was registered against the activists.