Maharashtra sugar mills seek relief from export quota

Published on : January 13, 2016 Topic : Business

Despite warnings issued by Maharashtra chief minister Devendra Fadnavis that sugar mills in Maharashtra will have to fulfill their mandated export quotas or be prepared to sell to the state public distribution system ( PDS) at regulated prices, in addition to losing incentives with regard to purchase tax and the export subsidy declared by the Centre, several mills in Marathwada, Soilapur and Ahmednagar region — that have been reeling under the effects of a drought — say that it will be difficult for them to meet the export target set by the Centre. These mills have written to the food secretary at the Centre seeking concessions and have sought permission to export 12% of the current season’s production.

The export quotas decided by the Centre take into account the average production of the mills for the last three years. However, if one takes into consideration the production figures for the current season, a mill may be unable to meet the export quota, B B Thombre, president, Western India Sugar Mills Association ( WISMA), said. Citing the example of his own mill, Thombre pointed out that his mill has crushed some 6.5 lakh tonne of cane and production is likely to lower than the stipulated quota of 1.25 lakh tonne of sugar. “Millers are not against export. Exports are necessary so that market sentiment improves. However, since it may be difficult for the mills to meet the quotas, this concession will help the mills out,” he said.

In the letter to the food secretary, milers have pointed out that mills in the drought affected areas are not in a position to even crush 50% of their installed capacity due to shortage of water. Most mills in these areas have no water to run their plants and the availability of cane is very acute. So, most mills will be closed down by January end, Thombre said in the letter.The average crushing will be for 80-90 days with total crushing of 35-50 % of the installed capacity.

Two mills lose licences

Maharashtra has suspended crushing licences of two more sugar mills belonging to political heavyweights for non-payment of fair and remunerative price dues for the season of 2014-15. According to state sugar commissioner Vipin Sharma, the crushing licenses of Padamshree Vitthalrao Vikhe Patil Sahakari Sakhar Karkhana and Sangamner Bhag Sakhar Sahakari Sakhar Karkhana have been suspended for the season.

Source: The Financial Express
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