Tamil Nadu seeks Centre's help to source sugar from UP

Tamil Nadu sugar mills want 600,000 tonnes from mills in Uttar Pradesh for supply in the coming season but want central government help on the transport cost.
 
Indian Sugar Mills Association (Isma) has supported their plea, arguing this should be done in view of Tamil Nadu’s bad drought. 
 
A meeting took place this week between the two states’ mill bodies, on Tamil Nadu’s plea for supply of raw sugar in season 2017-18 (starting October 1). Sugar output in Tamil Nadu has been declining for some years. With the deficient rain this season for the fourth year in a row, mills in Tamil Nadu are estimating only 550,000 or 650,000 tonnes of  output for 2017-18, as against 2.4 million tonnes in 2011-12. In sugar season 2016-17, the state reported output at 1.05 mt, almost equivalent to its annual consumption.

 

“The UP mills agreed to our request, but were uncomfortable with the transportation cost of Rs 3-3.5 a kg. Mills in Tamil Nadu cannot take this burden; it would inflate prices in the state. We, therefore, seek involvement of Isma,” said Paria Samy, president, South India Sugar Mills Association. The transport cost is estimated at Rs 180 crore.
 
UP mills have a surplus and the central government would also be happy with this exchange, obviating cheaper import.
 
India imported 0.5 mt of raw sugar in 2016-17 under Open General Licence to meet regional deficits, largely in the southern states. despite having surplus output in Uttar Pradesh.

 
Isma has written to the Union food ministry for the requested help. “There is a precedent when flood-affected states have been helped by the government as recently as sugar season (SS) 2007-08. Similarly, we would request to assist mills in Tamil Nadu get raw sugar from other states, by helping them through reimbursement of the transportation cost or providing a subsidy for the same,” went the letter.
 
Added T Sarita Reddy the Isma president: “The government can help the TN mills reduce their loss by restructuring their bank loans and giving them more time to repay, for which a special package may be announced. Also, the production subsidy of Rs 4.5 a quintal of sugarcane given by the  government in SS2015-16 was denied for the cane crushed after May 19, 2017 to the end of the season, which basically affected Tamil Nadu mills. It denied them a production subsidy of Rs 22.17 crore. This also may be considered and given as a special case."