Indian sugar mills association

UP sugar millers seek aid to tide over Rs 3,000 crore loss

Date:	11 Feb 2012

Source:	The Economic Times

Reporter:	Man Mohan Rai

News ID:	916

Pdf:
Nlink:

LUCKNOW: Facing a severe financial stress due to the obligation to pay cane arrears accumulated in the past and a decline in sugar prices in the last one month, sugar millers in Uttar Pradesh have written to the state government for providing a relief package in the interest of farmers and the industry.

The UP Sugar Mills Association in a letter to the UP government has said the sugar sector is going through a severe financial strain and staring at a loss of Rs 3,570 crore this season. The bleak outlook ahead has led to banks stopping credit to millers, it said.

This, say millers, may lead to huge payment defaults towards farmers and cause problems for all stakeholders.

UPSMA secretary SL Gupta has stated that high cane prices has forced most mills to operate at a loss and their working capital has already eroded. The Supreme Court order of January 17, 2012 directing mills to pay full SAP for the 2006-07 and 2007-08 seasons within the next three months would also lead to an additional burden of Rs 800 crore to the private sector, further aggravating the stress being faced by the sugar industry in UP, said Gupta.

With the UP government deciding to foot the bill for state-run cooperative mills for making full SAP payment for the 2006-08 season as per the SC order, private millers have also asked for some relief on the same lines.

UPSMA had demanded that a relief package for the sugar sector be announced with the UP government paying the differential cane price of 2007-08 as has been done with cooperative mills. It has asked for interest-free loans with a moratorium of at least 5 years for private sugar millers.

UPSMA has pointed out that the payment to farmers for the current season is already under stress due to the high cane cost. To alleviate this problem, UPSMA has asked for the remission of full purchase tax of Rs 2/quintal and Rs 3/quintal out of society commission. A full exemption of entry tax on sugar and a subsidy of Rs 20/quintal in cane price has also been demanded by UPSMA.

News

Navigation