Sugar mills in Maharashtra have managed to clear 95 per cent of their cane dues to farmers.
Mills, which had procured 549.98 lakh tonnes of sugarcane from farmers for at Rs. 13,121.69 crore as per the government declared Fair and Remunerative Price (FRP) till May 15, have cleared payment of Rs. 12,548.30 crore.
With the next season promising to be a bumper one, the National Federation of Cooperative Sugar Mills is actively promoting diversion of cane into ethanol in mills which have surplus sugar stock they are unable to sell.
Since the nationwide lockdown was announced in March, sugar sales have come to a standstill across the country. Ex-mill price of sugar, which had touched Rs. 3,200-3,250 per qunital before the lockdown, had crashed to Rs 3,100 per quintal as institutional buyers like sweet marts, aerated drinks manufacturers and ice cream makers stayed shut.
Similarly, exports that were robust came to a grinding halt as international prices took a nosedive due to the crisis in the oil market.
As of May 15, the total unpaid arrears in Maharashtra stood at Rs. 604.32 crore with 49 mills running up arrears. Of the 144 mills which had gone for crushing this season, 95 have cleared 100 per cent of their dues to farmers. Only 10 mills have unpaid dues below 60 per cent.
The National Federation of Cooperative Sugar Factories is urging mills in the state to prepare for the upcoming bumper season. Prakash Naiknavare, managing director of the Federation, said, “In April, international raw sugar prices had crashed at the back of the oil price drop but since then, there has been some temporary relief in the sector,” he said.
However, this relief was temporary as Brazil – the largest sugar producer in the world – not only started the season early but is also expected to divert a large portion of its cane crop to production of sugar rather than fuel additive ethanol. “As against the 33 per cent cane being diverted for production of sugar, which happened last year, the Brazilian mills are expected to divert 48 per cent of the crop for sugar,” he said.
With Brazilian mills starting their season early, Naiknavare feels the temporary price hike in international markets will correct in the coming days.
With sugar non-lucrative at the moment, Naiknavare said the federation is urging member mills to divert cane for production of ethano. “The fuel additive might be down and out but it will again be in demand once the economy restarts. The government has given enough signals that they take this seriously…” he said.
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