Several cooperative mills in Maharashtra have been finding it difficult to meet their commitments to pay cane growers due to curtailment in finance by Maharashtra State Cooperative Bank (MSCB).
These mills have fallen short on margins on advances, top officials of the bank said, according to a report by Financial Express.
Sources say the crisis is due to the dip in sugar prices, which have fallen to R 2,175 per quintal. Besides, the bank has already lowered valuations to R 2,200 per quintal on March 20 as a result of which a short margin crisis happened.
According to sources a similar situation had occurred last year when around 5-6 mills had fallen short on margins and had to pay up R5-7 crore. This time, however, the crisis has been bigger, sources say.
