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Sugar mills back move to build 4 million tonne buffer

11 Oct 2019 1:11 PM | Anonymous

Indian Sugar Mills Association welcomes Cabinet decision to raise sugar cane MSP.

The Centre has decided to expand the buffer stock of sugar and simultaneously halt the trend of raising the minimum support price for sugar cane to correct demand-supply imbalances, stabilise retail prices and reduce payment arrears from mills to farmers.

The two decisions taken by the Cabinet Committee on Economic Affairs on Wednesday, were welcomed by the sugar industry.

A series of bumper harvests over the past few years, combined with higher rates of sugar recovery from sugar cane, resulted in production vastly overshooting domestic demand and led to a crash in retail prices. Estimates suggest that the country will produce 32.95 million tonnes of sugar in the current marketing year, as against the annual domestic demand of just 26 million tonnes.

At the same time, the Centre has been regularly increasing the Fair and Remunerative Price, the minimum price that mills must pay to sugar cane cultivators, an important vote bank, especially in Uttar Pradesh. As a result, payment arrears shot up to ₹25,000 crore earlier this year, and are still above the ₹15,000 crore mark.

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