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SUGAR

CCEA gives approval to provision of financial assistance to sugar mills
Friday, 04 May, 2018, 08 : 00 AM [IST]
Our Bureau, New Delhi
The Cabinet Committee on Economic Affairs, chaired by prime minister Narendra Modi has given its approval to provide financial assistance at the rate of Rs 5.50 per quintal of cane crushed in sugar season (SS) 2017-18 to sugar mills to offset the cost of cane, in order to help sugar mills to clear the cane dues of farmers.

Details
  • The assistance shall be paid directly to the farmers on behalf of the mills
  • It will be adjusted against the cane price payable due to the farmers against fair and remunerative price (FRP), including arrears relating to previous years
  • Subsequent balance, if any, shall be credited into the mills’ account 
Assistance shall be provided to those mills which will fulfil the eligibility conditions as decided by the Government.

Background

Due to higher sugar production against the estimated consumption during the current sugar season (2017-18), the domestic sugar prices have remained depressed since the commencement of the season.

Due to depressed market sentiments and crash in sugar prices, the liquidity position of sugar mills has been adversely affected, leading to the accumulation of cane price dues of farmers, which have reached over Rs 19,000 crore.

In order to stabilise sugar prices at reasonable levels and to improve the liquidity position of mills, thereby enabling them to clear the cane price dues of farmers, the Government has taken following steps in the past three months:
  • Increased customs duty on import of sugar from 50 per cent to 100 per cent in the interest of farmers
  • Imposed reverse stock-holding limits on producers of sugar for the months of February and March 2018
  • The government has also fully withdrawn the customs duty on the export of sugar to encourage the sugar industry to start exploring the possibility of the export of sugar
  • In view of the inventory levels with the sugar industry and to facilitate the achievement of financial liquidity, mill-wise minimum indicative export quotas (MIEQs) have been fixed for sugar season 2017-18. Export quotas of 20 lakh tonne of all grades of sugar, viz raw, plantation white as well as refined, have been pro-rated amongst sugar factories by taking into account their average production of sugar achieved by the sugar mills during the last two operational sugar seasons and the current season (up to February 2018)
  • Further, to facilitate and incentivise the export of surplus sugar by sugar mills, the government has allowed the duty-free import authorisation (DFIA) scheme in respect of sugar
 
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