Cane arrears rise to Rs 14k cr till Jan; may touch record by month-end: ISMA

Cane arrears had increased to Rs 14,000 crore till January and might touch a record level by the end of this month because of fall in sugar prices and huge unsold inventories, industry body ISMA said today.

To improve liquidity of millers, the government should remove export duty of 20 per cent and allow shipment of 2 million tonnes immediately, it said in a statement.

As per the ISMA data, mills have produced 25.80 million tonnes sugar till March 15 of the 2017-18 marketing year (October-September), as against the target is 29.5 MT.

The top three sugar producing states Maharashtra, Uttar Pradesh and Karnataka -- contributed 9.38 MT, 8.43 MT and 3.51 MT.

Sugar output in India, the world's second largest producer after Brazil, stood at 20.3 MT in the 2016-17 marketing year.

Expressing concern over falling prices, Indian Sugar Mills Association (ISMA) said sugar mills are incurring losses as prices are ruling below the cost of production of around Rs 3,500-3,600 per quintal.

"They are unable to pay cane price to the farmers on time."
It added: "Considering the trend of cane price paid by the sugar mills in February and March in the last five sugar seasons, and the fact that only 30 per cent of sugar produced in these months gets sold and the rest gets stocked as unsold inventories, it is estimated that cane price arrears at the end of March 2018 may touch record levels and become uncomfortable."