InvestorQ : Does the government plan to cut the price of sugarcane payable to farmers and what does that mean for sugar producers like Balrampur, Dhampur, Dwarikesh and Parry?
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Does the government plan to cut the price of sugarcane payable to farmers and what does that mean for sugar producers like Balrampur, Dhampur, Dwarikesh and Parry?

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Arti Chavan answered.
2 months ago
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On the contrary, the union Food Minister Piyush Goyal has already clarified that the government will not reduce the minimum price at which the sugar mills must purchase sugarcane from farmers. Goyal also urged the industry to expand their product offering rather than just rely on the governments for subsidies each year.

Goyal added that the government's recent decision to provide a central export subsidy of Rs.3500 crore for 6 million tons of sugar was intended at liquidating the surplus inventory of sugar stocks. Most sugar mills wanted the sugarcane prices to be linked to the sugar price realization, which Goyal dismissed as being impractical.

Goyal spoke about a new order where the farmer gets an assured price and that is not tinkered with. So, the sugar mills will have to start their calculations based on that presumption. Goyal added that the generous subsidy to exports and the focus on ethanol blending was the hedge the risk of sugar mills from the assured pricing commitment.

Goyal also suggesting that the sugar industry must look at much higher blending of ethanol in petrol. For example, instead of just 10%, the sugar industry can even look at higher levels of ethanol blending of 20% or even 30%. Goyal also cited the example of Brazil, which had scaled ethanol blending all the way to 90% in some cases.

The minister had expressed concern over the sugarcane arrears to farmers in states like Uttar Pradesh. Goyal had asked the sugar mills to expeditiously clear the dues to farmers. India is the world’s second largest producer of sugar after Brazil. India has been experiencing a glut of sugar supply over the last few years, leading to huge inventories.

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