Sugar sales hit due to Covid-19; cooperative mills seek more time to clear unsold quota: NFCSF

The National Federation of Cooperative Sugar Factories (NFCSF) on Monday demanded that the government give more 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, it 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 tonne.

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 President Jaiprakash Dandegaonkar, there has been reduced sugar sales by nearly 1 million tonne 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, sugar sales and lapsed quotas, 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.

As a result of all this, 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 overdue 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 last five year.

"This will adversely affect the sale of sugar. We, the NFCSF have brought the issue to the notice of the central government and requested to extend the period for sale of quota sugar and declare a limited sugar quota for next month," the NFCSF President said.

Sugar production in India, the world's second-largest sugar-producing nation after Brazil, is estimated to be 30.2 million tonne in the ongoing 2020-21 marketing year (October-September), higher than annual demand of 26 million tonne.