Govt plans to build stockpile of 3 mn tonnes sugar to prop up prices

India will consider building stockpiles of 3 million tonnes of sugar, Food Minister Ram Vilas Paswan said on Tuesday, to prop up local prices and help money-losing mills pay dues to millions of cane growers, a key voting bloc.

The world’s second-biggest sugar producer will also make available 45 billion rupees ($669.89 million) in soft loans to sugar mills to expand ethanol production capacity, Paswan told reporters.

Local sugar prices have dropped to their lowest in 28 months, exacerbating financial woes of sugar mills. Citing their poor financial health, mills have said they are unable to pay cane farmers on time.

Mills now owe nearly 220 billion rupees, which could leap to a record 250 billion rupees in the current 2017/18 season.