Sugar mills continue to face liquidity crunch

Sugar mills in India are sure to face liquidity crunch for at the very least the subsequent a few months. The opening stability of 107 lakh tonnes (lt) of sugar stock this time has blocked substantial doing the job money of about ₹35,000 crore and most funds movement from sugar exports is possible in May possibly-June.

According to the Indian Sugar Mill Affiliation (ISMA), at present about eighty five-90 for every cent of the income generated by sugar mills is expended in direction of cane payment, owing to which about ₹93,000-ninety four,000 crore of cane price tag is payable to farmers in the latest time.

Also read: ISMA cuts sugar output estimate to 30.two mt

“The period up to April, 2021 is more of obtaining sugarcane and fewer of sugar income, which is lessening accessible funds flows to mills to allow them to spend cane price ranges to farmers as also reimbursement of bank financial loans,” ISMA DG Abinash Verma instructed BusinessLine. He additional that sugar exports have just commenced, and as for every marketplace experiences about seventeen-eighteen lakh tonnes of export contracts have been signed so much.

“Cash movement from sugar exports will only appear largely from May possibly-June 2021, which signifies sugar mills will keep on to face liquidity crunch,” Verma reported.

Also read: Sugar ouput at 177 lakh tonnes until Jan 31

Verma additional that out of the anticipated sugar manufacturing of 302 lakh tonnes in the latest time, sugar usage is anticipated to be only about 260 lakh tonnes, leaving about forty two lakh tonnes of unsold sugar stocks, which will block money to the tune of ₹15,000 crore.

ISMA demanded that the federal government ought to lengthen all benefits and incentives proposed to be offered to the sectors who contribute in direction of enhancing air high-quality and escalating renewable electrical power manufacturing in the nation, to the Indian sugar market/distilleries which produce and provide ethanol for mixing with petrol.