Cane arrears have reached about Rs 2,000 crore that millers say will only rise in the coming days .
The state government would soon procure sugar from mills at the rate of Rs 3,200 a quintal to arrest the slide in sugar prices. Minister for Cooperation Subhash Deshmukh, speaking to The Indian Express, said that around 25 per cent of total production in the state can thus be procured in the months to come.
Sugar mills are facing an unprecedented crisis in view of the fall in sugar prices. Mills in the state have even taken to reducing the first installment payment to growers in view of the liquidity crisis faced by them. Cane arrears in the state have already reached Rs 2,000 crore and millers fear it will grow further.
“In view of the crisis in the sugar sector, the Maharashtra State Cooperative Marketing Federation will purchase sugar in a staggered manner. The sugar will remain with mills and the state will either sell it after prices improve or dispose it of through other channels,” said the minister. A detailed proposal has been prepared and will be put before the state cabinet next week. The state government will stand guarantor for the Federation to raise the required capital, said an official.
Millers in the state had met officials at the Prime Minister’s Office (PMO) Saturday to discuss the alarming situation in the sugar industry. During the meeting, millers talked about the need to export sugar and take steps to curb import.
Representatives of millers who attended the meeting said they are hopeful of immediate action by the central government to arrest the price rise and imposition of import duty to stop entry of sugar from outside. “We hope exports will also be allowed as we are looking at a bumper production next year,” he said.
Deshmukh had met millers on Thursday to discuss the long pending matter of power purchase agreements between sugar millers and the state electricity corporation. “Post the meeting, a price of Rs 5 per MW was agreed upon,” he said.