Fifteen sugar mills face action for non-payment of dues to farmers

A short season notwithstanding, sugar prices have remained more or less on the higher side. But mills have struggled with mounting operational losses as most have been forced to continue crushing below capacity. Of the 200 mills which crushed cane this season, 105 have cleared 100 per cent of their dues. Fifty mills have paid between 80 per cent and 99.99 per cent of their dues, 30 mills have paid between 60 per cent and 79.99 per cent of their dues, while 14 mills have cleared less than 40 per cent of their total dues.

Questions over the final production figure have put uncertainties about the opening balance of the 2025-26 cane crushing season. It has ranged from 44 lakh tonnes (as per the National Federation of Cooperative Sugar Factories Ltd) to 54 lakh tonnes (as per the Indian Sugar and Bio Energy Manufacturers Association). The central government has allowed exports of 10 lakh tonnes of sugar, of which mills have concluded trade of 6 lakh tonnes. International sugar prices have dipped slightly with the Food and Agriculture Organisation (FAO)’s March indices going down by 1.6 points. This was mostly due to weaker than expected demand.

India’s production figures have caste a shadow over availability for the next few months. Vijay Autade, a senior analyst of the sugar industry, said the reason for many mills failing to pay their FRP is the skewed economy of sugar. “ Mills pledge their sugar stock with banks to raise working capital. At present the sugar valuation is done at Rs 3,500/quintal and banks provide 85 per cent of this as pledge loan. However, banks deduct security deposit and thus the in-hand money to pay FRP does not suffice. Mills also service old loans, which they had taken to pay FRP. Overall, year-on-year mills are caught in a vicious cycle over FRP payment,” he said.

Meanwhile, farm leader and former MP Raju Shetti met the sugar commissioner in Pune to demand full payment of pending dues. “Farmers should get their dues soon failing which we will be forced to take action,” he said.