Indian sugar mills association

Maharashtra sugar industry afraid, sugar mills bank accounts may become NPA

Date:	23 Sep 2016

Source:	The Economic Times

Reporter:	Jayashree Bhosale

News ID:	5999

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PUNE: With a smaller sugarcane crop to crush in the next sugar season starting October 1, 2016-17 and the government's firmness on keeping sugar prices tamed, the co-operative sugar industry of Maharashtra is afraid that bank accounts of many co-operative mills may become NPA.

The government is working hard to ensure that mills do not keep more than 37% of their stocks as on September 30 in order to keep prices stable during the festival season.

Dilip Walse Patil, president, National Federation of Co-operative Sugar Factories said, "When sugar prices had crashed, the central government gave us soft loan. Not, its repayment has started, which will make bank accounts of many mills NPA if the loan is not restructured."

Patil added that two reasons; firstly shortage of cane and secondly, the prevailing sugar prices, which are below the production cost, can make the accounts of sugar co-operatives NPA, which will make them non-eligible for further loans.

Pramod Karnad, managing director, Maharashtra State Co-operative Bank said, "We cannot rule of the possibility of bank accounts of sugar mills becoming NPA if either the moratorium on their soft loan repayment is not extended by an year or it is not restructured. The mills will have to repay their soft loan beginning April 2017.

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