India to pay 45 rupees/T incentive to cane growers -minister (updated)

Bannari Amman Sugars

18/11/2015 10:48

(Adds minister's quote, details) 
    NEW DELHI, Nov 18 (Reuters) - India will for the first time 
pay sugarcane farmers part of the cost for produce that they 
sell to money-losing mills, a government minister said on 
Tuesday after a cabinet meeting chaired by Prime Minister 
Narendra Modi. 
    The move will help mills hit by a free-fall in local sugar 
prices that was triggered by five years of surplus output. 
Citing poor finances, mills have not been paying millions of 
dollars to cane growers, who form a major voting bloc. 
    The sugar industry has been going through a crisis that has 
led to an arrears in payment of 60 billion-65 billion rupees 
($905.87 million-$981.35 million), and the decision for the 
government to shoulder some of the payments would help mills 
clear cane dues to farmers, Coal and Power Minister Piyush Goyal 
told a news conference. 
    "Under this scheme, the production subsidy will be given to 
offset the cost of cane and facilitate timely payment of cane 
prices to the farmers," he said. 
    The government would directly pay farmers 45 Indian rupees  
($0.68) for every tonne of cane produced, leaving sugar mills to 
bear nearly 98 percent of the cost. 
    The move is aimed at wooing politically influential cane 
growers and helping sugar mills recovering from a global glut.  
    Shares of Indian sugar companies have been rising on 
expectations of government help, with stocks of Shree Renuka 
Sugars  SRES.NS , Simbhaoli Sugars  SIMB.NS  and Bannari Amman 
Sugars  BANN.NS  shooting up further on Wednesday. 
    Last month Reuters reported that India, the world's biggest 
sugar consumer and the No. 2 producer after Brazil, was 
considering directly paying millions of cane farmers. 
 urn:newsml:reuters.com:*:nL3N12K4AY     
    Separately, the government has asked mills to export 4 
million tonnes of sugar in the 2015/16 season beginning October. 
 urn:newsml:reuters.com:*:nL3N10G266  urn:newsml:reuters.com:*:nL4N11O3QR 
     
    ($1 = 66.2350 Indian rupees) 
 
 (Reporting by Mayank Bhardwaj and Nigam Prusty; Editing by 
Malini Menon and Tom Hogue) 
 ((mayank.bhardwaj@thomsonreuters.com; +91-11-4178 1019; Reuters 
Messaging: mayank.bhardwaj.thomsonreuters.com@reuters.net)) 
 
Keywords: INDIA SUGAR/