Indian Sugar Mills Association (Isma) has estimated sugar production at 31.5 million tonnes in its Second Advance Estimate, a sharp downward revision from its earlier one of 35.5 mt. Another revision us due by end-January, likely to be lower still. Carryover stock from the earlier year is a little over 10 mt; the country’s annual consumption is 25 mt.
The arrears figure had reached Rs 25,000 crore in the middle of April last year, toward the end of crushing.
“The situation is alarming. The government needs to do something more to ensure mills fetch better realisation and clear cane arrears to farmers,” said Abinash Verma, director-general at Isma.
The mills have already asked for an increase in the minimum sale price of sugar by Rs 5 a kg, to Rs 34 a kg. Prices in the country are inching up but are still only Rs 2,950 a quintal (Rs 29.5 a kg) in the wholesale market.
Many mills in Maharashtra, according to reports, have stopped payment to farmers after a first instalment of 50 per cent; less in some cases.