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Private sugar mills in Maharashtra step ahead: Cooperatives fail to submit suggestions for crushing season

The failure of cooperative mills to submit their suggestions comes in the back drop of the mills hinting at loan default. The total quantum of loans comes to around Rs 3,640 crore.

Written by Partha Sarthi Biswas | Pune |
August 24, 2016 1:19:09 am
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Cooperative sugar mills in Maharashtra have failed to submit their suggestions to the state government for the upcoming season despite two letters from the sugar commissionerate. On the other hand, private mills in the state have placed their suggestions.

The sugar commissionerate had asked for suggestions from both cooperative and private mills which would be placed before the ministerial committee which would draw up the fine print for the 2016-17 crushing season.

Chaired by the chief minister, the ministerial committee is expected to meet soon and other than drawing up the details of the crushing season, it would also work out other details including financial or otherwise support to the mills.

This year’s ministerial committee meeting assumes importance as there is expected to be a significant reduction in cane area and subsequently a dip in production. Rough estimates have said that the state might see just over 6 lakh hectares of land under cane cultivation and sugar production is expected to be down by 40-45 per cent.

The failure of cooperative mills to submit their suggestions comes in the back drop of the mills hinting at loan default. Earlier this month, the Maharashtra State Cooperative Sugar Mills Federation had issued a press statement saying that a dip in production would affect repayment of loans.

The Federation had in fact asked for restructuring the loans. It has been learnt that private mills have made suggestions about the start of the season and on how the government should calculate the valuation of sugar.

Sugar mills in the state had availed soft loans and other loans in the crushing seasons of 2014-15 and 2015-16. The total quantum of loans comes to around Rs 3,640 crore. Roughly translated, each mill has loaned around Rs 20 crore which they have to repay in the next three years.

Asked about the failure of cooperative mills to submit their suggestions, Sanjiv Babar, managing director of the Federation, said that it is being finalised. “We will send the suggestions after the chairmans of the sugar mills approve them,” he said.

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Meanwhile, the financial health of sugar mills in Maharashtra seems to have improved due to surge in sugar prices. Barring 20 odd mills, most of them have managed to benefit from the high sugar prices which has been steady at Rs 3,000 per quintal since January.

The 20 mills in financial distress are located mostly in Solapur and Marathwada and had either seen less crushing in 2015-16 or had remained shut.
At present, the state has a stock of 45 lakh tonnes of sugar. As of August 15, Rs 351 crore remains to paid to growers as FRP with 64 of the 177 operational mills scoring 100 per cent payment.

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