Cane arrears mount to Rs 10,000 cr, says ISMA

Sugar production for Oct-Jan 2013-14 dropped 17% compared with a year-ago period

India’s sugar production till Friday, in the 2013-14 crop marketing season that started from October was reported at 11.54 million tonnes, almost 17 per cent less than the corresponding period last year because of late crushing in Uttar Pradesh and Maharashtra, the two biggest sugar producers.

According to the Indian Sugar Mills Association (ISMA), as on Friday, 487 mills were working as against 509 sugar mills. Cane crushing started late in UP and Maharashtra due to a stand-off between mills and farmers over pricing. ISMA said sugarcane arrears across India have climbed to around Rs 10,000 crore due to depressed sugar prices, which have fallen by almost Rs 6-8 a kilo compared with 14-15 months ago.

“The mills are, therefore, unable to pay the cane price of the farmers on time. It is feared that as the season progresses, the cane price arrears is only expected to go up further,” ISMA said in a statement.

Sugar farmers and mills have been at loggerheads due to high prices, with mills alleging that the state fixed price will inflate the already high arrears, while farmers demanded more rates.