One of the reasons for building of arrears in the current season is the decrease in demand due to COVID-19 and the nation-wide lockdown, which had reduced the consumption of sugar by around 10 LMT leading to lowering to revenue realisation of sugar mills.
According to reports, in a meeting held by the Union Minister for Food and Public Distribution and Consumer Affairs, Ram Vilas Paswan reviewed issues related to the sugar sector. The Government is optimistic that with the lifting of lockdown and opening of the economy, sale of sugar would normalize and in the balance 4 months of the current season i.e. from June-September 2020 sugar mills would be able to sell around 84 LMT of sugar in the domestic market. Secondly mills would be exporting about 10 LMT of sugar in the coming 4 months. This would improve cash flows of sugar mills by more than Rs.30,000 crores.
Moreover, DFPD would be releasing assistance to the tune of Rs.1100 crores on account & buffer subsidy to sugar mills this month itself. This would facilitate sugar mills in clearance of their balance arrears.
According to the latest release by Press Information Bureau, the Stock Position for current sugar season 2019-20 (October-September)
• Opening Stock (as on 01.10.2019) – 145 LMT
• Estimated production during sugar season 2019-20 – 270 LMT
• Estimated Domestic Consumption – 250 LMT
• Estimated Export during Sugar Season 2019-20 – 55 LMT (MAEQ)
• Estimated Closing Stock as on 30.09.2020 – 115 LMT
• Closing Stock as on 30.04.2020 – 235 LMT
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