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Rs 7,000 Crore Relief Approved for Sugar Industry

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To help cash-starved sugar mills with accumulated dues over Rs 22,000 crore, the Union Cabinet chaired by Prime Minister Narendra Modi on Wednesday announced a total relief of about Rs 7,000 crore.

Rs 7,000 Crore Relief Approved for Sugar Industry
 

In a press statement, the cabinet mentioned the following measures issued as relief:

  • Creation of buffer stock of 30 lakh metric tonnes of sugar for one year at an estimated expenditure of Rs.1175 crore to balance demand-supply mismatch. The reimbursement under the scheme would be made on a quarterly basis directly into farmers' account on behalf of mills against their cane price dues.
  • To notify Sugar Price (Control) Order, 2018 under Essential Commodities Act, 1955 to fix minimum selling price of white/refined sugar at the mill gate below which no white/refined sugar can be sold and delivered by a sugar mill in the domestic market.
  • To augment capacity through up-gradation of existing distilleries attached to sugar mills by installing incineration boilers and setting up new distilleries in sugar mills.

Excess production during the current sugar season and indication of higher production in the ensuing sugar season has been continuously depressing the market price of sugar. Due to the depressed market sentiments and crash in sugar prices, the liquidity position of the sugar mills has been adversely affected leading to accumulation of cane price dues which has already reached to an alarming level of more than Rs.22000 crore.

Most sugar stocks including Avadh Sugar & Energy Ltd, Uttam Sugar Mills Ltd and Ugar Sugar Works Ltd gained from the news.

Read more about: sugar
Story first published: Wednesday, June 6, 2018, 16:12 [IST]
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