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Sugar producers in Tamil Nadu have sought a relief package and staggered repayment option in order to tide over the crisis faced by them.
In an interaction with Union Finance Ministry Officials and CEOs of select banks, State government officials on Tuesday here, representatives of South Indian Sugar Mills Association (SISMA) and sugarcane farmers explained their grievances and sought help from the government.
Representatives of SISMA pointed out that sugarcane planting area had drastically come down in the State and that had resulted in poor capacity utilisation of mills.
At least 14 of the 25 private sugar mills in Tamil Nadu will not commence operations in the 2019-2020 sugar season due to shortage of sugarcane and liquidity constraints, a statement quoting SISMA said.
SISMA members requested for staggering repayment and debt restructuring. They also sought a special relief package to the entire industry.
However, they pointed out that the industry had just started to turn around and with proper relief measures, and will come out of the stress cycle in the next 18 months. A special request was made to the Banks and RBI to consider fresh loans and restructuring.
Farmers’ representatives expressed their grievances on persistent drought, withering crops, unpaid dues, mounting debt. They also informed that increasing overdues affected their other financial sources. They requested for a special relief package to resolve the NPA issue.
Pankaj Jain, Additional Secretary, DFS said the Central government was looking into the market challenges and pricing fundamentals.
In July, EID Parry India said it decided to shut down its unit at Pudukottai in Tamil Nadu. The factory, which was not in operation due to continuous non-availability of adequate sugar cane, will not be operated in future as the expectation of the revival of cane cultivation in the area is low due to a variety of factors. Last season, Thiru Arooran Sugars did not crush cane in any of its mills in the state.
Deficient rainfall in the past few years has caused huge stress to the sugar producing units in the state. While capacity utilisation fell significantly, sugar production has also fallen from 23.79 lakh tonnes in 2011-12 to 8.6 lakh tonnes in 2018-19.
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