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    Food ministry chalks out plan to liquidate sugar mills stocks worth Rs 30,000 crore

    Synopsis

    “Apart from that, we would be releasing assistance of Rs 1,100 crore on account of export and buffer subsidy to sugar mills this month itself. This would facilitate sugar mills in clearance of their balance arrears, which have crossed Rs 22,000 crore,” said a senior food ministry official.

    The country is likely to produce 27 million tonnes in this year.
    New Delhi: Food ministry has chalked out four-month plan to liquidate stocks worth Rs 30,000 crore with sugar mills to help them improve cash flow and pay cane arrears to farmers, officials said.

    “Apart from that, we would be releasing assistance of Rs 1,100 crore on account of export and buffer subsidy to sugar mills this month itself. This would facilitate sugar mills in clearance of their balance arrears, which have crossed Rs 22,000 crore,” said a senior food ministry official.

    He said the lockdown had hit sugar consumption. “There was drop in consumption by 1 million tonnes. This has led to the building up of cane arrears. Now with the lifting of lockdown and opening of economy, sale of sugar would normalize in the balance four months of the current season from June to September,” he said.

    The official said that sugar mills would be able to sell around 8.4 million tonnes of sugar in the domestic market and export 1 million tonnes in the next four months. The country is likely to produce 27 million tonnes in this year.

    “So far sugar mills have contracted export of 4.2 million tonnes. In next four months another 1 million tonnes are likely to be shipped. The government will give subsidy of Rs 10,448 per tonne up to a maximum of 6 million tonnes at an estimated cost of Rs 6,268 crore,” the official said.

    The government also reimburses carrying cost of Rs.1674 crore towards maintenance of buffer stock of 4 million tonnes of sugar.

    “Sugar mills will get additional liquidity of around Rs 300 crore as government is considering increase in minimum selling price (MSP) of sugar by up to Rs 2 per kg to Rs 33 a kg. The MSP is the the rate at which millers sell sugar to bulk purchasers at mill gate,” the official said.
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