Chennai: Tamil Nadu sugar mill owners and representatives have met Chief Minister Edappadi K Palaniswami seeking financial assistance and certain decontrol measures in the operations of sugar mills NSE -3.11 % to tide over what they regard as "distressing" crisis following five years of less-than-desired rainfall in the state.
Chennai: Tamil Nadu sugar mill owners and representatives have met Chief Minister Edappadi K Palaniswami seeking financial assistance and certain decontrol measures in the operations of sugar mills NSE -3.11 % to tide over what they regard as "distressing" crisis following five years of less-than-desired rainfall in the state.
The company officials met with the Chief Minister and presented a memorandum dated July 18, 2018.
"Lower capacity utilisation, depressed sugar recovery and a massive fall in sugar prices have resulted in lower revenue generation," Palani G Periasamy, President of South Indian Sugar Mills Association told in the memorandum to the Chief Minister.
Sugar rates have been touching lows for a year, but have risen from lows touched in May. The Indian Sugar Mills Association has predicted a higher output in the forthcoming Sugar season. The Centre has also announced a higher Fair and Remunerative Price for the farmers, fixed at Rs 275 a quintal for the 2018-19 sugar year. This does not augur well for states like Tamil Nadu where debt-burdened sugar mills have found it difficult to pay lower FRPs.
"The precarious financial position of sugar mills indicate it would be very difficult to begin crushing operations next season [Sugar year 18-19]," Periasamy told in the letter.
Among measures that the industry finds necessary are a direct sibsidy provided by the government to the farmers at Rs 300 a tonne so that sugar manufacturers will be able to fulfil their FRP obligation. The sugar mills have also asked for a ban on import of alcohol from other states, long-term power purchase agreements with the co-generation power plants of the sugar mills, and a soft loan of Rs 500 a tonne for every tonne of cane crushed.
"These measures are very much necessary to pull the state private sugar mills out of a looming crisis," Pariasamy told ET.
The sugar mills have also included in their wishlist a list of measures that the Government of India needs to take to reverse their fortunes: rescheduling of loans, exemptions from export and monthly sales quotas.
The company officials met with the Chief Minister and presented a memorandum dated July 18, 2018.
"Lower capacity utilisation, depressed sugar recovery and a massive fall in sugar prices have resulted in lower revenue generation," Palani G Periasamy, President of South Indian Sugar Mills Association told in the memorandum to the Chief Minister.
Sugar rates have been touching lows for a year, but have risen from lows touched in May. The Indian Sugar Mills Association has predicted a higher output in the forthcoming Sugar season. The Centre has also announced a higher Fair and Remunerative Price for the farmers, fixed at Rs 275 a quintal for the 2018-19 sugar year. This does not augur well for states like Tamil Nadu where debt-burdened sugar mills have found it difficult to pay lower FRPs.
"The precarious financial position of sugar mills indicate it would be very difficult to begin crushing operations next season [Sugar year 18-19]," Periasamy told in the letter.
Among measures that the industry finds necessary are a direct sibsidy provided by the government to the farmers at Rs 300 a tonne so that sugar manufacturers will be able to fulfil their FRP obligation. The sugar mills have also asked for a ban on import of alcohol from other states, long-term power purchase agreements with the co-generation power plants of the sugar mills, and a soft loan of Rs 500 a tonne for every tonne of cane crushed.
"These measures are very much necessary to pull the state private sugar mills out of a looming crisis," Pariasamy told ET.
The sugar mills have also included in their wishlist a list of measures that the Government of India needs to take to reverse their fortunes: rescheduling of loans, exemptions from export and monthly sales quotas.