This would enable the mills to carry out necessary maintenance work on plant and machinery, apart from financing stocks and reeivables, during the course of the cane crushing season, which is expected to start from the last week of October and extend till April-May 2020.
In the 2018-19 crushing season, the state government had given a similar guarantee worth nearly Rs 2,704 crore for the cooperative sector mills. Thus, the estimated working capital requirement by these mills for the coming season has risen by Rs 517 crore or by almost 20 per cent over the previous cycle.
Of the 119 sugar mills
in UP, 94 belong to the private sector, making up 80 per cent of the total, followed by cooperative sector entities at 23 (20 per cent). One factory is run by UP State Sugar Corporation Limited (UPSSCL).
The state government plans to reenergise a few more cooperative sector mills in the coming crushing season.
Meanwhile, the August 31 deadline set by the CM for mills to settle farmers’ arrears has long expired, while the outstanding dues stand at more than Rs 6,000 crore against net payables of Rs 33,047 crore for 2018-19 crushing season.
The top defaulters in the private sector include Bajaj Hindusthan, Simbhaoli and the Modi group. The state had already warned defaulters it may file cases under Section 3/7 of Essential Commodities Act (ESA) 1955 and issue of recovery certificates (RC), which authorises district administration to seize plant and stock for auctioning, if farmers aren’t paid on time.
“Sugarcane payment happens with liquidation of stock and it is the responsibility of the government to facilitate such sale. We have been given limited quota for selling sugar and are facing the double whammy of maintaining inventory and not being able to sell,” a private sugar mill official had earlier told Business Standard.
While western UP units would start operating in the last week of October, sugar mills
in central and eastern UP have been asked to start by the end of first and second weeks of November respectively.
In 2018-19 season, the state's sugar output stood at about 11.8 million tonnes compared to over 12 million tonnes in 2017-18.