Cane arrears of farmers across the country stood at Rs 14,000 crore till January 31 this year. As per industry body Indian Sugar Mills Association (ISMA) it might touch a record level by the end of this month because of fall in sugar prices and huge unsold inventories.
The sugar mills are unable to pay cane prices to the farmer on time as they are incurring losses since prices are ruling below the cost of production of around Rs 3,500-3,600 per quintal. The ex-mill sugar prices are hovering between Rs 2,900 per quintal in western and southern states and Rs 3,000 per quintal in northern states.
Sugar output in India, the world’s second largest producer after Brazil, stood at 20.3 MT in the 2016-17 marketing year (October-September).