Maharashtra sugar mills plead Centre to revisit stock holding limit

Appeals rescheduling of loan due to weak financial condition

The cooperative sugar industry in Maharashtra has made a plea to the Centre to reconsider its decision allowing states to fix the stock holding limit on sugar, which is ruling around Rs 40 per kg in the retail market.

The decision empowers state and central agencies to impose stock limits and regulate supply, distribution, storage and trade of sugar to bring down prices to reasonable levels by curbing unscrupulous trading.

The industry under the banner of Federation of Cooperative Sugar Factories in Maharashtra, has said the government's decision, which came into effect last week, has led to fall in sugar price by Rs 200-300 per quintal to Rs 3,250 per quintal from Rs 3,400-3,500 per quintal. The reduction in sugar prices have further resulted in mismatch between the cost of production and revenue mobilised from the sale.

The cooperative sugar industry representatives, who met the state chief minister Devendra Fadnavis on Wednesday, will soon make a formal representation to the Centre in this regard fearing that many factories will go in for distress sale and ultimately become bankrupt.

Maharashtra produces about one third of country's sugar. The state sugar mills comprising both cooperative and private factories have produced 8.3 million tons of sugar as on April 30 this year with 5 sugar mills still in operation. Last year during the same period, sugar mills in this state had produced 10.34 million tons with 30 sugar mills in operation. The ongoing drought in 21 districts has severely impacted the sugarcane availability.

The Federation chairman Shivajirao Nagawade said the industry will appeal to the Centre and the state government to restructure loan worth Rs 2,792.71 crore due to weak financial condition.''The factories were forced to seek loan from banks and financial institutions as since last three years they had faced drought apart from volatility in sugar prices. They are not in a position to repay the loan within the given time and therefore need for reschedulement,'' he noted.

Further, Nagawade said the industry will also make a plea to reconsider the sugar export policy following drastic fall in sugar production due to sugarcane loss in the present drought and its use as fodder in drought hit districts.