Journalism of Courage
Sugar mills facing surplus stocks and escalation of cane arrears have given a cautious welcome to the central government’s decision to promote export of 40 lakh tonne sugar for the 2015-16 season. The 195 sugar mills in Maharashtra have been given an export quota of 13 lakh tonne.
Fixing a quota for export before start of crushing season has been a demand of sugar mills, which in Maharashtra have been reeling under unsold stocks. The unsold inventory in the state had touched 55 lakh metric tonne. A glut in international sugar market and low sugar prices led to the crisis. Cane arrears in the state is to the tune of around Rs 2,900 crore with mills failing to pay farmers fixed and remunerative price (FRP). Although drought has resulted in a decrease in cane area in the state this year, not much is expected of price realisation.
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The central government had in March announced an incentive of Rs 4,000 per tonne for export of 1.4 million tonne of raw sugar but it did not result in much export. The state’s quota of 13 lakh tonne is by far the highest in the country, and other major sugar producing states like Uttar Pradesh and Karnataka are trailing. Both cooperative and private sugar mills have been allocated export quotas, which can be traded amongst mills. The quota will lapse if they fail to export within the stipulated time period. Export of raw sugar and white sugar has been allowed.
Sanjiv Babar, managing director of the Maharashtra State Cooperative Sugar Factories Association said the central directive has not mentioned the incentive. “Incentive was announced for raw sugar export… no talk of incentive has been given in the circular,” he said. Babar added that cost of production is higher than mill gate price, and exports without incentives will be tough.
B B Thombare, president of Western India Sugar Mills Association, said: “We had discussed the issue with the PM. It will help the industry to survive a tough season.”
