Former union agriculture minister Sharad Pawar has batted for a special financial package for the sugar sector in view of the ongoing COVID 19 crisis. In a letter addressed to Prime Minister Narendra Modi, Pawar has called for a one time grant of Rs 650 per tonne of cane crushed for the last two seasons as well as increasing the Minimum Selling Price (MSP) of sugar from the present Rs 3,100 per quintal to Rs 3,450-3750/- per quintal.
The COVID 19 crisis has seen sugar mills struggling to reduce their inventories as both domestic markets and international markets clamp down. In the domestic front, industrial sales of sugars to cold drinks, ice cream manufacturers, sweetmeat shops etc have stopped as most have stopped production. Exports had come to a standstill as international prices of sugar had crashed below the 10 cents per pound mark making it non economical for mills to export sugar.
At the start of the season, the central government had set a target of 6million tonnes (mt) of exports under the subsidy linked export program. At the start of the COVID 19 crisis, millers had inked export orders of around 3.8 mt of which around 3 mt was shipped out. However, once the COVID crisis saw international prices going down hill, exports have been hit. Now industry sources say not more than 4.2mt of the sweetener can go out of the country.
In his letter, the NCP supremo made a strong case for increasing the MSP of sugar from the present Rs 3,100 to Rs 3,450-3,750 per quintal range. (Depending upon the grade or size of grains of sugar). Similarly, he has asked for a one time grant of Rs 650 per tonne of cane crushed in the last two seasons. Conversion of all working capital loans into short term loans and rescheduling of all term loans for 10 years have also figured in his letter. Interestingly, Pawar has asked the banks to treat the Ethanaol units as stand alone units and not take the financial health of the sugar mills in consideration while sanctioning loans for the construction of the units.
The sugar industry both in Uttar Pradesh and Maharashtra have been reeling under lower sales which had seen the mills failing to clear their dues with the farmers.
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