The sugar sector which was reeling under the impact of sliding prices and bulging stocks is being slowly nursed back to health with steps taken by the government bearing fruit for farmers and millers. The revival in prices has also helped.

Millers were bleeding due to crashing sugar prices and increasing cane arrears of farmers last April. But with prices improving -almost coming close to the production cost -and the industry aggressively offloading excess stock due to government measures, a crisis seems to have been averted. Cane arrears for 2014-15 sugar season has declined to only Rs 2,712 crore from Rs 21,000 crore in April.

According to the apex body of sugar millers, ISMA, the all India average ex-mill price this year is Rs 29.50 per kg against last year's price of Rs 24.92. The production cost has remained around Rs 31. “The increase in ex-mill prices has happened in the past three four months. The difference between production cost and ex-mill price is somewhere close than what was prevalent in July 2014. This is a very positive sentiment and we expect the same to continue during 2016-17 sugar season. If this continues for three-four years the industry will revive in a big way ,“ said ISMA secretary general Avinash Verma.

“The main reason behind the crisis had been the excess production,“ an official said.Officials said the private players have also stepped up their exports since government set the minimum indicative quota target for the industry to ship out 40 lakh tonne.