Sugar industry demand restructuring of Rs 50,000 loan
PUNE: The private as well as co-operative sugar industry of the country has demanded restructuring of the Rs 50,000 crore term loans, restoration of ethanol prices at last year’s level and excise duty waiver on ethanol.
“The industry was forced to borrow loans to pay cane price to the farmers. The Government of India also gave loans under SEFASU and thereafter Soft Loans. Rs.10,000 crore was borrowed by the industry under these 2 schemes only to pay cane price of farmers,” stated an ISMA release pointing that the Indian sugar industry went through financial crisis in the last 2-3 years, mainly on account of surplus sugar production and depressed sugar prices. The sugar prices in 2014-15 fell to its lowest in th ..
The borrowing in the last few years has seen the debt burden jump by almost 4 times to around Rs.50,000 crore currently. “Despite improvement in sugar prices, it is still not sufficient to enable the industry to service all its debt at the same time. Additionally, Rs.10,000 crore of loans taken to pay cane price of farmers under the SEFASU and Soft-Loans have become due from the current season itself.
With a more balanced demand-supply position of sugar, one expects the sugar prices to be stable in the next year or so. However, with increase in SAP for sugarcane in the States in U.P., Punjab, Haryana and Uttarakhand, and low capacity utilization in Maharashtra, Karnataka and Telangana due to less availability of sugarcane because of drought in the last 2 years and low sugar recovery reported in States like Tamil Nadu, Andhra Pradesh etc., the all India average cost of production of sugar is u ..
“The Government and RBI should slightly modify the threshold limit under the S4A scheme of debt restructuring, from Rs.500 crore to Rs.100 crore. We also requested for re-schedulement of repayment of SEFASU loans and soft-loans and extension of interest subvention on Soft Loan for another 3 years,” ISMA said.
In addition to the industry’s requests for financial restructuring and reschedulement of repayment of loans, the ethanol blending programme was also discussed. It was submitted therein that the ethanol prices should be restored at last year’s level and the benefit of excise duty waiver should be reconsidered and passed on to the ethanol manufacturers.
“ISMA would continue to very keenly follow the above submissions so that a debt restructuring plan is announced for the sugar mills as quickly as possible and some positive steps are taken to encourage supply of more ethanol,” said ISMA.
A healthy closing balance equivalent to more than 2 months consumption requirement will still be available for next season to meet the need of the country before the new season’s sugar is available in the market from November, 2017 so there was definitely no need at all to import any sugar. ISMA felt that the Government agrees with this position.
Source: ECONOMIC TIMES