NEW DELHI: The government may increase the ex-mill price of
sugar at factory gate to Rs 33-34 a kg against the current rate of Rs 29 and make it mandatory for private
mills to export at least seven million tonnes next year to tide over the crisis of high arrears of cane-growers.
The cane arrears usually peak in April, which would be just a month before the
Lok Sabha elections are slated and sugar cane farmers can influence the poll outcome of at least 100 parliamentary seats. The decisions would be announced soon to help the millers prepare their action plan.
Sources said these options are being considered keeping in mind that the peak cane arrears during April could touch Rs 40,000 crore due to bumper crop. Last April, the maximum arrears was a little over Rs 23,000 crore.
The next sugar season starts from October.
A senior government official said millers have submitted that clearing the cane arrears quickly won’t be possible, if the floor rate for sugar is not increased. “The government has no option other than taking a decision to address the concerns of farmers. The millers have said they cannot clear the arrears if the sugar rate at factory gate is Rs 29, which doesn’t even recover the cost of production,” he said.
India is staring at another round of bumper crop during the next sugar season and the likelihood of an excess stock of about 10.5 million tonnes carried forward from the current season will result in a bigger glut.
According to estimates, about 35 million tonnes would be produced between October 2018 and September 2019 sugar year. Even after meeting the domestic demand of about 26 million tonnes, the stockpile of the sweetener would be around 19 million tonnes.
TOI has learnt that a committee of secretaries, headed by cabinet secretary, recently held a meeting on framing the export policy.
“So, the only option left for us is to push the export of sugar, which has to be mandatory as compared to the present voluntary norm for millers,” said another official.
