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Stock Market Tips >> Maharashtra plans to buy state's one-fourth sugar output to support prices
local sugar prices have fallen 17 percent since the start of the marketing year on Oct 1, making it difficult for the mills to make payments
India's second-biggest sugar producer Maharashtra plans to buy a quarter of the state's output to arrest falling prices for the sweetener, a state minister told Reuters, a move that would require $1 billion and leave mills to cover storage costs.
The government purchase plan - which the state would need to approve in the next cabinet meeting - would help Maharashtra sugar mills pay dues to sugarcane farmers that have risen to more than Rs 30 billion ($470 million).
"We are planning to buy 25 percent of the sugar production of each mill.
The government buying will reduce availability at the market and prices could rise," said Subhash Deshmukh, the cooperation and marketing minister for the state government.
India, the world's second-biggest sugar producer, requires mills to pay cane farmers within two weeks of harvest. Last year, the mills agreed to pay farmers 11 percent more for their cane for the 2017/18 marketing year than in the previous year.
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