PUNE: The private as well as co-operative sugar industry of the country has demanded restructuring of the Rs 50,000 crore term loans, restoration of ethanol prices at last year's level and excise duty waiver on ethanol.
The borrowing in the last few years has seen the debt burden jump by almost 4 times to around Rs.50,000 crore currently. "Despite improvement in sugar prices, it is still not sufficient to enable the industry to service all its debt at the same time. Additionally, Rs.10,000 crore of loans taken to pay cane price of farmers under the SEFASU and Soft-Loans have become due from the current season itself.
With a more balanced demand-supply position of sugar, one expects the sugar prices to be stable in the next year or so. However, with increase in SAP for sugarcane in the States in U.P., Punjab, Haryana and Uttarakhand, and low capacity utilization in Maharashtra, Karnataka and Telangana due to less availability of sugarcane because of drought in the last 2 years and low sugar recovery reported in States like Tamil Nadu, Andhra Pradesh etc., the all India average cost of production of sugar is up by around Rs.2 per kilo in the current sugar season 2016-17 over last year.
"The Government and RBI should slightly modify the threshold limit under the S4A scheme of debt restructuring, from Rs.500 crore to Rs.100 crore. We also requested for re-schedulement of repayment of SEFASU loans and soft-loans and extension of interest subvention on Soft Loan for another 3 years," ISMA said.
A healthy closing balance equivalent to more than 2 months consumption requirement will still be available for next season to meet the need of the country before the new season’s sugar is available in the market from November, 2017 so there was definitely no need at all to import any sugar. ISMA felt that the Government agrees with this position.