Maharashtra cooperative sugar factories bat for more relief

Say Centre's subsidy of Rs 4,000 a tonne for export of 1.4 mn tonne of raw sugar is too little to survive, especially amid falling prices

Managements of cooperative sugar units in Maharashtra said the Centre’s subsidy of Rs 4,000 a tonne for export of 1.4 million tonnes (mt) of raw sugar is too little to survive, especially amid falling prices. They fear that the raw sugar export package is not enough for the factories to make the payment of fair and remunerative price (FRP) to cane growers.

Sanjeev Babar, managing director, Federation of Cooperative Sugar Factories in Maharashtra, told Business Standard: “The Federation will make a fresh appeal to the Centre to provide financial support of Rs 700 a tonne, create buffer stock of 7.5 mt and increase import duty to 40 per cent from the present level of 25 per cent to provide much needed relief to the cooperative sector.”

Babar said the Centre needs to provide raw sugar subsidy since the beginning of the current crushing season 2014-15 and not from the day of issue of notification. “The incentive amount should be made available within a specific period which will come quite handy for factories to pay the FRP to cane growers,” he added.

Babar said that in all 178 sugar factories comprising 99 cooperative and 79 private are currently engaged in cane crushing during the current season and they have so far produced 6.77 mt of sugar. The sugar production is expected to be 9.2 mt by the end of crushing season.

In Maharashtra, FRP for 9.5 per cent recovery is Rs 2,200 a tonne, while the current sugar price is Rs 2,350 a quintal. There will be a rise of Rs 232 a tonne in FRP for every one per cent rise in recovery. For 11 per cent recovery, FRP comes to Rs 2,650 a tonne.

Already, the Office of the Sugar Commissioner has launched revenue recovery proceedings against factories for their default in the FRP payment.