Industry body Indian Sugar Mills Association (ISMA) thought welcomed the Cabinet’s decisions of extending a package of Rs.8,500 crore to help the sugar mills and cane farmers, it said that it may not impact retail prices significantly.
Industry body Indian Sugar Mills Association (ISMA) thought welcomed the Cabinet’s decisions of extending a package of Rs.8,500 crore to help the sugar mills and cane farmers, it said that it may not impact retail prices significantly.
“The decision to fix a minimum ex-mill sale price of sugar at Rs.29 per kilo will improve ex-mill prices from current levels of around Rs. 28 per kilo, but may not impact the retail prices in any significant way,” stated a release from ISMA.
The industry Association has said that the proposed minimum price of Rs. 29 per kilo is not enough to cover the cost of sugarcane at FRP of Rs.290 per quintal at the current all India average recovery of 10.8%. “The ex-mill sugar price which supports the current FRP works out to around Rs.35 per kilo and therefore the Rs.29 is inadequate,” it said.
ISMA said that it will be a challenge to expect the sugar industry to clear the huge cane price arrears on this basis.
However, it welcomed other step of providing subsidised loans for ethanol production capacity as an excellent move.
“It will encourage setting up of more distilleries in the country over the next 3 years and will help in diverting some of the surplus sugarcane into ethanol and reduce surplus sugar in the long run. However the decision to impose stock holding limits on sugar mills tantamounts to controls on sugar sales which is not the right way to move into the future,” it said.
Industry expects creation of buffer stocks of 30 lakh tons will reduce some surplus sugar from the market, though only for a year, and will improve market sentiments to support domestic prices.
“What is concerning is that there is no idea or proposal on rationalisation of cane pricing policy, which is actually the main reason for all the problems of the industry today,” stated the ISMA release.
“The decision to fix a minimum ex-mill sale price of sugar at Rs.29 per kilo will improve ex-mill prices from current levels of around Rs. 28 per kilo, but may not impact the retail prices in any significant way,” stated a release from ISMA.
The industry Association has said that the proposed minimum price of Rs. 29 per kilo is not enough to cover the cost of sugarcane at FRP of Rs.290 per quintal at the current all India average recovery of 10.8%. “The ex-mill sugar price which supports the current FRP works out to around Rs.35 per kilo and therefore the Rs.29 is inadequate,” it said.
ISMA said that it will be a challenge to expect the sugar industry to clear the huge cane price arrears on this basis.
However, it welcomed other step of providing subsidised loans for ethanol production capacity as an excellent move.
“It will encourage setting up of more distilleries in the country over the next 3 years and will help in diverting some of the surplus sugarcane into ethanol and reduce surplus sugar in the long run. However the decision to impose stock holding limits on sugar mills tantamounts to controls on sugar sales which is not the right way to move into the future,” it said.
Industry expects creation of buffer stocks of 30 lakh tons will reduce some surplus sugar from the market, though only for a year, and will improve market sentiments to support domestic prices.
“What is concerning is that there is no idea or proposal on rationalisation of cane pricing policy, which is actually the main reason for all the problems of the industry today,” stated the ISMA release.