To improve the revenue realization of mills and ensure timely cane payment to farmers, ISMA said it is hopeful that the government will increase the minimum selling price (MSP) of sugar from the current level.
This "will in turn ease the current situation of very high cane price arrears. Otherwise, it is feared that if the current situation persists, then cane price arrears will jump very fast to alarming levels," Indian Sugar Mills Association (ISMA) said in a statement.
Quoting government data, ISMA said, cane arrear so far this year is higher as compared to arrears one year back when it was around Rs 19,200 crore.
"The prevailing low ex-mill sugar prices for the last several months, has adversely affected the liquidity of mills and their ability to pay the price to cane farmers," it added.
Releasing the latest sugar production data, ISMA said mills have manufactured 27.75 million tonne of sugar till March of the ongoing 2020-21 season (October-September), higher than 23.31 million tonne a year ago.
Sugar production in Maharashtra, the country''s leading producing state, rose to 10 million tonne from 5.9 million tonne, while the output in Uttar Pradesh, the second largest producer, was slightly lower at 9.37 million tonne from 9.72 million tonne in the said period.
Sugar output in Karnataka, the country''s third biggest producer, increased to 4.13 million tonne till March from 3.35 million tonne a year ago, ISMA said.
ISMA has pegged the country''s total sugar output to be 30.2 million tonne in the 2020-21 season, higher than 27.42 million tonne in the 2019-20 season.