Cane arrears rise over 19 pc to Rs 22,900 cr till Feb of 2020-21 season amid liquidity crunch: ISMA

Cane dues to be paid by sugar mills to farmers has risen by 19.27 percent to Rs 22,900 crore till February of the 2020-21 season from the year-ago period, due to depressed sugar prices that have adversely affected the liquidity condition of mills, industry body ISMA said on Thursday.

To improve the revenue realization of mills and ensure timely cane payment to farmers, ISMA said it is hopeful that the government will increase the minimum selling price (MSP) of sugar from the current level.

This ''will in turn ease the current situation of very high cane price arrears. Otherwise, it is feared that if the current situation persists, then cane price arrears will jump very fast to alarming levels,'' Indian Sugar Mills Association (ISMA) said in a statement.

Quoting government data, ISMA said, cane arrear so far this year is higher as compared to arrears one year back when it was around Rs 19,200 crore.

''The prevailing low ex-mill sugar prices for the last several months has adversely affected the liquidity of mills and their ability to pay the price to cane farmers,'' it added.

Releasing the latest sugar production data, ISMA said mills have manufactured 27.75 million tonnes of sugar till March of the ongoing 2020-21 season (October-September), higher than 23.31 million tonnes a year ago.

Sugar production in Maharashtra, the country's leading producing state, rose to 10 million tonnes from 5.9 million tonnes, while the output in Uttar Pradesh, the second-largest producer, was slightly lower at 9.37 million tonnes from 9.72 million tonnes in the said period.

Sugar output in Karnataka, the country's third-biggest producer, increased to 4.13 million tonnes till March from 3.35 million tonnes a year ago, ISMA said.

ISMA has pegged the country's total sugar output to be 30.2 million tonnes in the 2020-21 season, higher than 27.42 million tonnes in the 2019-20 season.