With sugar prices on the higher side, the total outstanding amount owed by mills to the Maharashtra State Cooperative Bank (MSCB) at the end of the season is at an all time high of Rs 2,900 crore, top officials of the bank said. Significantly, the state has continued to step up pressure on millers for not making fair and remunerative price (FRP) payments for the 2015-16 season.
Normally, by the end of March and April, sugar mills end up selling stocks and outstandings get reduced to some Rs 1,300 crore-1,400 crore, Pramod Karnad, MD, MSCB, said. However, this time, the mills seem to be holding on to stocks and therefore the outstandings are nearly double, he said. This season, the bank had floated a special 5% margin money loan scheme to help mills recoup the gap in making FRP payments. Under the normal practice, the bank usually gives 85% funds to mills leaving 15% margins to overcome any volatility in the market.
Even as the state’s sugar season has ended with the last mill completing crushing operations a couple of days ago, the apex cooperative bank of the state has raised valuations for sugar this month to Rs 3,100 per tonne as against Rs 2975 per tonne. Last month, the bank had increased valuations for sugar by Rs 210 per tonne to Rs 2,975 per tonne. This time valuations has been raised by Rs 125 per tonne. This is the ninth time this season that valuations have been raised for mills, Karnad said, adding that this leaves more money for making cane payments. However, millers are still sitting on stocks. Valuations were first raised at the start of the season to Rs 2,190 per tonne, which gave the mills some Rs 1,860 per tonne in hand for payments.
Meanwhile, the sugar commissionerate has stepped up pressure on mills for their failure to make the remaining 20% FRP payments for the season of 2015-16. Revenue and recovery certificate (RRC) orders were issued to four mills, crushing licences of two mills were cancelled, two licences were suspended for the season. Hearings were held for some 26 mills, of which 10 mills made payments, while two mills made marginal payments and so were given more time.
In the first week of May, the RRC orders have been issued against six mills, crushing licenses of six mills has been cancelled and crushing licences of another eight mills has been suspended. Of the eight mills, four mills have made payments. The total fine for crushing without licence comes up to Rs 116 crore, he said. Hearings were held for some 32 factories last week. According to the latest arrear report, around 84% of the FRP payments have been recovered while 14% millers still owe payments to farmers.The government has also taken action against 23 factories for not making FRP payments of 2014-15.
Unpaid dues * The total outstanding amount owed by mills to the Maharashtra State Cooperative Bank (MSCB) at the end of the season is at an all-time high of Rs 2,900 crore, top officials of the bank said * The state has continued to step up pressure on millers for not making fair and remunerative price payments for the 2015-16 season