With imported sugar available in the market at cheaper rates, the sugar industries in Orissa are facing problem to sell their products at remunerative prices.
Sugar brought from countries like Brazil and Thailand are selling at cheaper rate because the government of India had waived import duty on sugar when the price of the commodity had shot up to Rs 40 to Rs 45 per kg in the open market. The tax sops are still in force.
“Since people are unwilling to buy our sugar at higher rates, we are forced to sell the product at rates below our cost of production”, said a senior officer of the Aska Cooperative Sugar Industries Limited (ACSIL), a state government owned industry at Aska in Orissa’s Ganjam district.
While the cost of production of a quintal sugar was Rs 2900 at ACSIL in the last crushing season, the company sold it at Rs 2610 per quintal. Despite this, the bidders from Andhra Pradesh were unwilling to lift sugar from the factory, the sources said. Faced with this problem, the sales committee of the factory last week has decided to further lower the price to Rs 2550 per quintal. “We had to lower the price as no bidder was keen to lift sugar from the factory”, one of the members of the committee told Business Standard here.
The issue is not unique to ACSIL as all the six sugar industries, managed by the private and cooperative sectors, in the state are facing the same situation. If this continues for more days, all the sugar factories in the state will be closed down, feared Ganjam district sugarcane growers association.
The problem is further compounded with the Central government imposing Excise Duty at the rate of Rs 97.85 per quintal and fixing levy quota at 20 percent of the totals production. The levy price of sugar is fixed at Rs 1219 per quintal, which is un-remunerative for the industry.
Demanding waiver of Excise Duty on sugar produced in Orissa, secretary, Ganjam district sugarcane growers’ association, Samir Pradhan said, the Center should provide a package to bailout the loss incurring sugar industries in the state. Otherwise, they will be forced to down their shutters in near future, he warned.