Sugar output in 2016-17 may be lower due to drought: Government

C R Chaudhary said there is sufficient sugar stock available in the current season to meet demand of 255 lakh mt

Sugar production during the ensuing season of 2016-17 could be lower compared with the current year's estimated output of 252 lakh MT due to drought that hit Maharashtra and Karnataka, Parliament was informed.

Minister of State for Consumer Affairs, Food and Public Distribution C R Chaudhary, however, said there is sufficient sugar stock available in the current season to meet demand of 255 lakh MT and the government has already taken steps to prevent a price rise of the commodity.

"Due to drought in the states of Maharashtra and Karnataka there is possibility of decrease of in sugar production in the country during the ensuing sugar season 2016-17 as compared to estimated production of 252 lakh MT in the current season," Chaudhary said in a written reply in Lok Sabha.

The minister, however, said it is too early to estimate the sugar production for season 2017-18 at this stage stating that sugar production during a particular season depends on a variety of factors, including area under cultivation, yield, drawal of cane for crushing by mills and recovery of sugar.

On the availability of sugar for the ongoing season, he said: "With an opening stock of 90 lakh MT and estimated production of 252 lakh MT, the availability of sugar in the current sugar seasons is sufficient to meet estimated demand of 255 lakh MT."

The minister further said in order to keep a check on rise in price of sugar, the government has imposed "stock holding and turnover limits on sugar".

"Further, government has imposed custom duty at a rate of 20 per cent on export of sugar to conserve stocks in the country and ensure its availability," Chaudhary said.

In reply to another query, the minister said due to surplus sugar production in the last five consecutive sugar seasons over domestic consumption and depressed sugar prices, the liquidity of sugar mills have been adversely affected leading to accumulation of cane price arrears to farmers.

"As on July 31, 2016, Rs 6,598 crore are outstanding against sugar mills for each of the last three years and the current year," the minister added.

He said the Centre has taken several initiatives to help the sugar industry resolve liquidity problems and thereby facilitate clearance of cane price arrears to the farmers.

Incentive of Rs 483.87 crore on raw sugar export, interest free loans of Rs 6,420 crore under SEFASU, and notification of production subsidy at a rate of Rs 4.5 per quintal cane crushed to offset cane cost, are some of the measures taken up to support the sugar industry, he added.