Government may create 30 lakh tonne sugar buffer stock

NEW DELHI: Food minister Ram Vilas Paswan said the government is considering to create a 30-lakh tonne sugar buffer stock to clear about Rs 22,000 crore dues of sugarcane farmers to be paid by mills. He said that despite government rolling out minimum indicative export quantity of 20 lakh tonnes, the mills were not able to export sugar in the face of weak global prices.

The mills were not fulfilling the condition to avail the Rs 1,540 crore financial assistance package announced by the government wherein farmers were to get Rs 5.50 per quintal of sugarcane supplied to the mills because they were unable to export, officials said. “We are considering a proposal to create a buffer stock of 30 lakh tonne. The industry has not been able to export 20 lakh tonnes as globally prices were lower than the Indian sugar prices,” said Paswan.

Food ministry officials say that a draft cabinet note on the proposal has been moved for inter-ministerial consultation. “The mills are not exporting hence we are coming up with a buffer stock and other measures to ensure farmers get their sugar dues,” said the official. The industry is expecting government to reintroduce the monthly release mechanism of sugar and imposing stock limits on mills by fixing quota for each mill.

The food minister added that the petroleum ministry was considering blending ethanol with petrol and ways to help sugar mills would be the ethanol sector.

Due to higher sugar production in the 2017-18 sugar season (October–September), domestic sugar prices have been depressed since the commencement of the season. Sugar output this year is estimated to be 31.9 million tonnes compared with 20.3 million tonnes in the previous year. India consumes around 25 million tonnes a year.