Lok Sabha Question No. 55 (UNSTARRED), answered on 2018-12-11
Subject: Sugar Production
Ministry: CONSUMER AFFAIRS, FOOD AND PUBLIC DISTRIBUTION
Asked by: R. GOPALAKRISHNAN

## GOVERNMENT OF INDIA

## MINISTRY OF CONSUMER AFFAIRS, FOOD & PUBLIC DISTRIBUTION DEPARTMENT OF FOOD AND PUBLIC DISTRIBUTION

## LOK SABHA UNSTARRED QUESTION NO. 55

## TO BE ANSWERED ON 11 DECEMBER, 2018

## SUGAR PRODUCTION

## 55. SHRI R. GOPALAKRISHNAN:

Will the Minister of CONSUMER AFFAIRS, FOOD AND PUBLIC DISTRIBUTION miHkksDrk ekeys] [kk| vkSj lkoZtfud forj.k ea=h be pleased to state:

- (a)   whether it is a fact that excess sugar production and carryover stocks are expected to create liquidity problem;
- (b)   if so, the details thereof; and
- (c)   the details of steps taken to protect both the sugarcane farmers and the cane sugar producers to overcome their persisting problems?

## A N S W E R

MINISTER OF STATE FOR  CONSUMER AFFAIRS, FOOD & PUBLIC DISTRIBUTION (SHRI C. R. CHAUDHARY)

- (a) & (b): Sugar production in the previous sugar season was about 322 LMT which is  much  higher  than  the  consumption  of  255  LMT.  The  excess sugar production in the previous season and estimation of similar production in the current sugar season 2018-19 has adversely affected market sentiments due to which the ex-mill prices of sugar in the domestic market have fallen sharply and came down in the range of Rs. 24.50 to Rs. 26 per kg in the month of May, 2018. Low realization from sale of sugar due to surplus sugar stock has adversely affected the liquidity position of sugar mills.
- (c): With a view to improve the liquidity position of sugar mills enabling them to clear  cane price arrears of farmers, the Government has taken the following measures during last few months:-
- (i) In  order  to  prevent  cash  loss  and  to  facilitate  sugar  mills  to  clear cane dues of farmers in time, the Government has fixed a minimum selling price of sugar at Rs.29/kg for sale at factory gate in domestic market, below which no sugar mill can sell sugar.

- (ii) Extending Assistance to sugar mills @Rs.5.50/quintal of cane crushed for  sugar  season  2017-18  to  offset  the  cost  of  cane  amounting  to about Rs.1540 crore;
- (iii) Created  buffer  stock  of  30  LMT  in  sugar  season  2017-18  for  which Government  will  reimburse  carrying  cost  of  Rs.1175  crore  towards maintenance of buffer stock;
- (iv) Extending soft loans of Rs. 6139 crore through banks to the mills for setting up new distilleries and installation of incineration boilers to augment ethanol production capacity  for which Government will bear interest subvention of Rs. 1332 crore;
- (v) Extending Assistance to sugar mills @Rs.13.88/quintal of cane crushed  for sugar season  2018-19  to  offset the cost of  cane amounting to about Rs.4163 crore;
- (vi) Extending Assistance to sugar mills for defraying expenditure towards  internal  transport,  freight,  handling  and  other  charges  to facilitate  export  of  sugar  from  the  country  in  sugar  season  2018-19 amounting to about Rs. 1375 crore.
- (vii) Government has also notified new National Policy on Bio-Fuels, 2018 under  which  sugarcane  juice  has  been  allowed  for  production  of ethanol.  Further,  the  Government  has  fixed  remunerative  price  of ethanol produced from C-Heavy molasses and B-Heavy molasses/sugarcane  juice  separately  for  supply  under  EBP  during ethanol season 2018-19.

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