Sugar stocks row: Maharashtra mills fail to get relief from HC

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Pune | Updated: September 30, 2016 7:20:55 AM

Private millers, through the Western India Sugar Mills Association (WISMA), have written to the secretary, food & civil supplies, at the Centre, seeking a withdrawal of the order.

With little time left in hand, millers are now finding it difficult to sell their stocks and meet the prescribed limits imposed by the Centre. (Reuters)With little time left in hand, millers are now finding it difficult to sell their stocks and meet the prescribed limits imposed by the Centre. (Reuters)

Sugar mills in Maharashtra have been caught on the backfoot. Even as the Maharashtra State Cooperative Sugar Factories Federation (MSCSFF) filed a writ petition in the Bombay High Court challenging the Centre’s directives to reduce the sugar stocks of mills to 37% by this month-end, no interim relief has been granted by the court. The next date for hearing has been fixed on October 7. Private millers, however, through the Western India Sugar Mills Association (WISMA), have written to the secretary, food & civil supplies, at the Centre, seeking a withdrawal of the order.

With little time left in hand, millers are now finding it difficult to sell their stocks and meet the prescribed limits imposed by the Centre. The Centre, in a letter dated September 8, has directed every sugar mill in the state to maintain only 37% of their stocks and offload the rest by September 30. However, according to officials of the federation, as on September 19, at least 90 cooperative mills in the state had stocks to the tune of some 31 lakh tonne.

According to BB Thombare, president, WISMA, the association has urged the government to withdraw the order. “The GR regarding the stock limits was issued on September 15 and there have been heavy rains in Maharashtra in the last fortnight, making it difficult for mills to arrange for transport and logistics to meet the deadline… The lack of demand in the market is leading to a fall in prices. High production cost, low capacity utilisation and less sugar realisation are leading to industry sickness. The industry is the backbone of the rural economy and such price control mechanisms create problems for its survival. We therefore appeal to the government to withdraw such kind of policies,” he said in the letter to the secretary.

Keeping in view the logistics constraints of transporting sugar to reduce mills’ stocks to 37% by September 30, the deadline may be extended by 30 days more, he said. The mills have sought an extension of one month for the sale of the stocks. Thombre said that although the millers may have sold stocks, the physical delivery may not have taken place due to difficulties faced in logistics and the stocks were still in the mills. He wondered how this issue would be treated by officials.

Several mills have now advertised bringing out tenders for sale of sugar as the deadline has almost approached. Shree Siddheshwar Sahakari Sakhar Karkhana has advertised a tender for the sale of around 4 lakh quintals and Vignahar Sahakari Sakhar Karkhana has sold around 2 lakh quintals in September. Tukaram Pathare, chairman of the factory, confirmed that his mill had sold some 2 lakh quintals this month. “The government asked mills to export sugar when rates were high and had promised subsidy of R45 per tonne. That has been withdrawn. Now that the rates have fallen, the stock limit ceiling has been imposed because of which mills are getting lesser rates d R200-300 per quintal. In contrast there are no ceiling limits on traders,” he said.

Analyst Yogesh Pande said none of the mills took the issue seriously. “The notification was issued on September 8 and the talk of restriction was done much earlier. Intentions of restrictions were tweeted by the minister. The mills should have challenged this restriction earlier,” he said. At least 90 mills had surplus stocks, he said.

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