Cane Price Payment would be difficult for the Sugar Mills to Pay: ISMA DG

ISMA is dedicated for the betterment of sugarcane farmers in the country, and one of the main objective of ISMA is to protect the interest of the cane farmers in the country, for whom sugarcane is the only source of livelihood. ISMA is engaged with the Government to develop long-term policies whereby the interest of its main stakeholders- farmers, millers and consumers are sustained and protected against the cyclical nature of the industry.  

The current FRP of Rs.255/- per quintal linked to a basic recovery rate of 9.5 percent, is unaffordable at current sugar prices, because of which at the end of June, 2018, cane price arrears are still over Rs.18,000/- crore. For the first time, the cane arrears are so high, and the highest ever. This is almost Rs.14000-15000 crore higher as compared to the last two years in June when the cane arrears were between Rs.4500 to Rs.4800 crores. Therefore, the increased FRP for next season (Rs.275/- per quintal at 10% recovery ) will be more unaffordable for the sugar mills to pay to the farmers, unless concrete and focussed steps are taken to help improve ex-mill sugar prices to at least Rs.35/- a kilo. 

Also strong efforts should be made to export 60 to 70 lac tons of sugar, to improve cash flows. 2018-19 sugar production is expected to be around 350-355 lac tons but sugar consumption is expected to be around 255 lac tons. To bridge this huge gap, additional cash flows would have to be managed supplementing domestic sale, by mainly exporting sugar, as cane price payment next year would be at Rs.97,000 crore,  which would be difficult for the sugar mills to pay not only during the season but even at the end of the season in Sept 2019."

ISMA has taken up a lot of initiatives to develop the country’s sugar industry. It’s the first in the country to do pan-India satellite mapping of sugarcane areas in the country. Through satellite mapping, cane acreage is estimated in the 14 cane growing State in the country. This helps in estimating the likely sugar production in a season, and in planning ahead more efficiently.

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