Mills pay off 67 per cent of total FRP as sugar prices remain firm

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30 December 2021New Delhi: The season, which started in October, had seen crushing of 232.98 lakh tonnes of cane till the middle of December.

Sugar mills in Maharashtra have reported more than satisfactory payment to their farmers as ex-mill prices of sugar continue to hold firm in the state. Till December 15, of the 175 sugar mills which are in operation, 66 have reportedly paid 100 per cent of their dues to farmers for the cane procured.

The season, which started in October, had seen crushing of 232.98 lakh tonnes of cane till the middle of December. State mills had to pay farmers Rs 7,588.44 crore as the fair and remunerative price (FRP). Mills have, till now, paid Rs 5,074.59 crore to their farmers, which is 66.87 per cent of the total payment to be made. As many as 100 mills have cleared 100 per cent of their payment. This is a far better performance than last season when, of the 168 mills operational, only 48 had cleared full payment.

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One of the main reasons for this pace of payment is the relatively firm ex-mill sugar prices in Maharashtra. Most mills have reported sales at Rs 3,200-3,250/quintal, which have been holding steady since the start of the season. Exports have also shown a healthy trend, with the country reporting export contracts worth 34 lakh tonnes, of which 20 lakh tonnes have already been shipped out.

Sanjay Khatal, managing director of the Maharashtra State Cooperative Sugar Factories Federation, said he expects the present export rally to last at least till April next year. “Brazil’s season is expected to start post April but their crop condition is far from satisfactory. We feel that export will reach 60 lakh tonnes even before Brazil starts its season,” he said.

This season, all exports are being carried out under open general licence, which means without any government subsidy.
Meanwhile, the state sugar commissioner’s office has issued licences to 190 mills, of which most have started operations till December 28. Nine applications are pending, which are expected to be issued once the mills cleared their pending FRP dues. The sugar commissioner’s office had taken a firm stance about FRP payment and refused to issue licences unless the mills cleared their dues to farmers.

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