FPJ Exclusive: Maha Sugar industry seeks financial package on lines of UP, Bihar, Punjab & Haryana

The ailing cooperative sugar industry in Maharashtra sought former union minister Sharad Pawar's help to stay afloat. The industry, which is passing through severe financial crisis due to economic slowdown and operational challenges, on Thursday in Pawar's presence demanded financial package on the lines of Uttar Pradesh, Punjab, Haryana and Bihar, restructuring of loans and transport subsidy of Rs 250 per quintal to boost sale in the country and export. FPJ recently broke the story on sugar industry's financial stress and demand for bailout package.

Industry sources told FPJ,'' There has been a mismatch between the ex-mill sugar price of Rs 3,100 per quintal and the cost of production of Rs 3,400 per quintal. Against such odds, Mills have to pay fair and remunerative price (FRP) to farmers. There is a difference of Rs 300 per quintal between the minimum support price announced by the Government of India and the production cost. This has further put pressure of finances. The state government needs to immediately provide financial package on the lines of Uttar Pradesh, Punjab, Harayana and Bihar. UP has provided the Rs 4,000 crore package with a simple interest rate of 5% even to private mills.'' Industry made a strong case for restructuring of loans to provide a much needed relief.

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Sources said the industry also wants transport subsidy of Rs 250 per quintal to face the stiff competition from Uttar Pradesh which is the largest sugar producer.

Cooperation Minister Balasaheb Patil, who was present at today's meeting, said the government will sympathetically consider industry's demands.

As on date, 77 cooperative and 66 private mills are participating in the current crushing season 2019-20. They have produced 2.8 million tonnes of sugar and the industry estimates total sugar production of 5.8 million tonnes by the end of crushing season. This will be almost half compared to sugar production of 10.7 million tonnes in 2018-19.

Industry has projected 10.7 million tonnes of sugar production because of excess sugarcane availability for next crushing season 2020-21.

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