COVID-19 affects sale of unsold sugar quota by cooperative sugar mills: NFCSF

The National Federation of Cooperative Sugar Factories (NFCSF) has asked for additional time to clear the unsold sugar quota as sales have been hit due to the pandemic. Mills are also finding it difficult to sell sugar at a government-fixed rate of Rs 31 per kg. They are facing fund crunch and not able to make cane payment to growers on time, NFCSF said. 

With slump in sugar demand, NFCSF urged the government to allocate lesser sugar quota for sale in the next month. For April, the government has fixed a record sugar sale quota of 22 lakh tonnes.

The government fixes sugar sale quota every month based on production figures of mills across the country so that all small and big mills can sell sugar. According to NFCSF, there has been reduced sugar sales by nearly 1 million tonnes due to sluggish demand owing to the nationwide lockdown imposed in March last year, resulting in shutdown of all confectionery, soft drinks, chocolates, biscuits and sweetmeats business.

After a review of the quotas released in the last six months, it seems that 50 per cent of the quota of cooperative sugar mills has remained unsold, NFCSF said in a statement. Only half of the quotas received could be sold and that too at Rs 31 per kg. But even at this rate, cooperative sugar mills are finding it difficult to sell, it observed.

NFCSF said the cooperative sugar mills have been “under stress” as their funds have been blocked in the sugar stock and interest burden on that is rising daily. This has led to “stagnation of farmers’ cane bills, staff salaries and clearing other over due payments,” it said. 

On top of it, NFCSF said the central government announced a record sugar sale quota of 22 lakh tonne for the current month. This quota is 4 lakh tonne more than the average of 18 lakh tonnes announced in the last five years.

Sugar production in India, the world’s second largest sugar producing nation after Brazil, is estimated to be 30.2 million tonnes in the ongoing 2020-21 marketing year (October-September). 

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