MUMBAI: Government will provide zero interest loans to sugar millers to help them clear cane price arrears of 2006/07 and 2007/08 season, a government statement said. The move is aimed at improving the liquidity position of sugar factories, who are reeling under a glut.
Huge supplies have impacted prices in India, which have fallen to record lows in last one year. Prices in the futures market have fallen by over 27 percent in a year, data from National Commodity and Derivaties Exchange Ltd showed.
The loans, which can be availed by all mills functional during 2006/07 and 2007/08 season, will be for a period of four years including two years of moratorium, the statement on the ministry of consumer affairs Web site issued on Saturday said. Interest subvention will be limited to 12 percent a year, the statement said.
According to London-based International Sugar Organisation India may produce 33.15 million tonnes of sugar in 2007/08 as against 29 million tonnes a year ago. The total domestic consumption is estimated at 19.5 million tonnes.
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