Hit by losses, sugar mills seek government subsidy2 min read
PATNA: The Bihar Sugar Mills Association (BSMA) has urged the state government to give sugar millers a minimum subsidy of Rs 40 per quintal for the 2017-18 cane crushing season to tide over the losses caused to them due to dip in sugar prices nationally.
BSMA secretary Naresh Bhatt said on Thursday that the sale price of sugar has fallen to Rs 2,900-3m000 per quintal nationally, putting the Bihar sugar millers to a loss of Rs 700 per quintal or a total of Rs 485 crore loss for all the cane crushed during 2017-18.
“Since 2017-18 proved to be a surplus season, the sale price of sugar is expected to fall more in the coming days. We have urged the state government to give subsidy at the minimum rate of Rs 40 per quintal. It will help sugar millers to meet financial loss to some extent.”
Cane crushing in state during 2017-18 stood at 70 lakh tonne. With the sugar recovery rate of cane in the state being 9.5%, the expected sugar production would be 6.7 lakh tonne. However, the approximate cost of sugar production in the state is Rs 3,800 per quintal. Accordingly, the expected loss to the millers would be Rs 700 per quintal or Rs 485 crore in total.
“After the introduction of Goods and Services Tax (GST) at 5% on sugar and 28% on molasses, the state government is getting the revenue of about Rs 600 crore from sugar industry,” Bhatt said.
The BSMA has also requested the state government to make early payment of the “pending subsidy” of Rs 70.97 crore to the sugar mills so as to help them in clearing the balance cane price payment of cane farmers.