Analyst Corner: Maintain ‘buy’ with target price of Rs 360 for SBI – The Financial Express

Analyst Corner: Maintain ‘buy’ with target price of Rs 360 for SBI – The Financial Express

SBIN earnings have been suppressed over past several years owing to challenges on asset quality, merger issues and adverse rate environment.Analyst Corner: Maintain ‘buy’ with target price of Rs 360 for SBISBIN earnings have been suppressed over past several years owing to challenges on asset quality, merger issues and adverse rate environment. However with bulk of asset quality cleansing behind and sharp decline in watch-list size to INR203b (1% of loans) we expect credit cost to decline sharply, thus paving way for earnings recovery. Net stressed assets at 5.9% of total loans has also been showing improvement while PCR has increased sharply from 43% in 1QFY18 to 54% currently (71% including tech. w/offs).We factor in FY19E slippage of INR460b vs avg. slippage of INR1.08t in FY17-18. SBIN has provided well on its NCLT exposure (PCR of 64% in NCLT List-1 and 78% in List-2) which will drive healthy write-backs over next two quarters and will help offset the provisioning requirement towards stressed power assets. The recent moderation in bond yields will provide significant boost to treasury performance which coupled with potential monetisation in subsidiaries will drive healthy growth in other income. We thus conservatively expect RoA/RoE to improve to 0.7%/13.3% by FY21 and revise our target price to INR360 (1.2x Sep-20E ABV for the bank + INR79 per share for subs). Maintain Buy.SBIN has increased its 1-year MCLR by 60bp since Jan’18 (advances yield for SBI has moved by only 5bp during similar period) which will drive an improvement in lending yield as portfolio re-pricing occurs. Further, with sharp moderation in NPL formation and decline in net stressed assets we expect interest income to get a boost as reversals subside. Pick-up in systemic credit growth and ongoing turmoil in NBFC space have lent increased pricing power and growth opportunities to banks and we expect SBIN to benefit from the prevailing macro conditions. SBIN term deposit rates are at significant discount to other larger peers which will help it maintain strong control on funding cost.Get live Stock Prices from BSE and NSE and latest NAV, portfolio of Mutual Funds, calculate your tax by Income Tax Calculator, know market’s Top Gainers, Top Losers & Best Equity Funds. Like us on Facebook and follow us on Twitter.

Metals: Reiterate ‘hold’ for Tata Steel, JSW – The Financial Express

Metals: Reiterate ‘hold’ for Tata Steel, JSW – The Financial Express

As prospects of Chinese steel demand decline for CY19 become more and more acute, Indian steel players are rediscovering the perils of high leverage in a deep cyclical sector. Metals: Reiterate ‘hold’ for Tata Steel, JSWAs prospects of Chinese steel demand decline for CY19 become more and more acute, Indian steel players are rediscovering the perils of high leverage in a deep cyclical sector. What is also disconcerting and what we have highlighted briefly post our visit to JSW Steel plant is the lack of depth in the Indian steel market. Historically, premier players like Tata Steel and JSW has been pushing HRC into domestic market through subsequent expansions while undertaking measured CRC investments and hoping for the same to get domestically absorbed. However, there is a real risk emerging, that Indian market may be getting saturated in its ability to absorb the same. FY18 witnessed, for the first time in the last 14 years, India turning to a net exporter of both HRC and CRC — the trend continues with Apr–Oct’18. This trend is also resounding with the latest JPC data of relative weakness in the overall flats demand in the country, a trend which can easily exacerbate in the coming years. Hence, when we witness the strategy of Indian steel players of subsequent expansion based on first HRC followed by some measured CRC capacities, perhaps a discounted value on landed price (similar to what prevailed prior to CY04) is what is about to start getting into practice. This will have negative margin implications for Tata Steel and JSW — We remain cautious on both and reiterate our HOLD rating on the names.The signs of stress are imminent as India consolidates its net exporter status in both HRC and CRC. FY18 witnessed the first shift after 14 years, as market was not yet ready to absorb the latest increase in HRC/CRC capacities. 7MFY19 while experiencing a drop in flat product exports YoY, is still consolidating on this trend. Higher utilisation of recently acquired NCLT assets, Dolvi expansion and finally KPO phase 2, along with what comes across as quite shallow — a market to absorb all these capacities (specially in the high value add segment), will only increase exports further.Get live Stock Prices from BSE and NSE and latest NAV, portfolio of Mutual Funds, calculate your tax by Income Tax Calculator, know market’s Top Gainers, Top Losers & Best Equity Funds. Like us on Facebook and follow us on Twitter.

CD issuances surge on widening liquidity deficit – The Financial Express

CD issuances surge on widening liquidity deficit – The Financial Express

The average liquidity deficit has more than tripled during the week of December 10- 14 to `84,737 crore compared with the average liquidity deficit of Rs 27,492 crore in the previous week.CD issuances surge on widening liquidity deficitWith banking system liquidity deficit remaining high — it was around Rs 1 lakh crore on Monday — there has been a rise in the issuance of certificate of deposit (CDs). On Tuesday, Axis Bank and IDFC Bank together raised `3,650 crore through CDs. The amount was similar to Monday’s volume of Rs 3,400 crore. Currently, the interest rates on three-month CDs are in the range of 6.85-6.95%.The average liquidity deficit has more than tripled during the week of December 10- 14 to `84,737 crore compared with the average liquidity deficit of Rs 27,492 crore in the previous week.According to experts at CARE Ratings, the high deficit can primarily be attributed to the payment of the third tranche of advance taxes (December 15 deadline). The expansion in currency in circulation, fuelled by the wedding season and year end demand has also been a factor pressuring liquidity.In the commercial paper (CP) market, the quantum of issuance has increased but has not reached the pre-ILFS levels because most NBFCs are redeeming their papers which are lined-up for maturity in the month, dealers said.According to dealers, rates quoted on two-month commercial papers of NBFCs were in the range of 7.20-7.35%, while those of manufacturing companies were at 6.90-7.10%.Compared from the start of November, rates have fallen by 100-140 basis points mainly because of strong inflows into liquid funds and improved liquidity of the fund houses.Dealers expect a spike is CP issuances in the coming days after the quarterly advance tax payments, which typically starts from 15th of the quarter-ending month, and also because of outflows of goods and service tax for December.The call money market rate rose to a seven-week high of 6.52% on December 12, following which it declined sharply to end the week at 6.05%, 36 bps lower than the previous week close and at a 6-weeks low.Get live Stock Prices from BSE and NSE and latest NAV, portfolio of Mutual Funds, calculate your tax by Income Tax Calculator, know market’s Top Gainers, Top Losers & Best Equity Funds. Like us on Facebook and follow us on Twitter.

Good news on growth front: Non-food credit growth rises to 15.07% – The Financial Express

Good news on growth front: Non-food credit growth rises to 15.07% – The Financial Express

The deposit rate growth has been below 10% since over a year from August 4, 2017 owing to the high deposits on account of demonetisation, also impacting loan growth. Non-food credit growth rises 15.07%The growth in non-food bank credit rose by 15.07% year-on-year during the fortnight ended December 7 from 14.92% in the previous fortnight. The growth comes off a relative weak base; in 2017 banks were lending cautiously as they were grappling with loan losses and demand from companies was muted. Deposits with the banking system grew 9.66% y-o-y to Rs 118.84 lakh crore as on December 7, compared to deposits amounting to `108.37 lakh crore in the previous year.The deposit rate growth has been below 10% since over a year from August 4, 2017 owing to the high deposits on account of demonetisation, also impacting loan growth. Again, borrowings had shifted to the money markets — bond and commercial paper markets — in 2016 and 2017 since interest rates in those markets was lower.With the rate cycle having tuned, bank funds today are turning out to be slightly cheaper for borrowers. According to provisional data released by the Reserve Bank of India, outstanding loans to companies and individuals stood at `92.03 lakh crore on December 7, a tad higher than `91.32 lakh crore on November 23 and `79.98 lakh crore a year ago.Bank credit has been picking up pace and grew at 15.1% year-on-year in the fortnight ended November 23. On the other hand, deposit growth over the past many months has been growing slowly; in the fortnight to November 23, they grew at 9.4%. As a consequence banks have been raising both deposit rates and loan rates. “The lower deposit growth amid higher credit growth has been a factor contributing to the liquidity constraints in the banking system”, say experts at CARE Ratings.An upward movement in lending yields, a direct result of MCLR rate hikes over the last four-five months is seen on the RBI’s data for system wide average lending and deposit rates for September and October. MCLR is marginal cost of funds lending rate and banks charge customers a spread on this rate. A string of banks including SBI, HDFC Bank and ICICI Bank have hiked MCLR rates by 5-10 basis points in December. According to a senior SBI executive, “The current market does not necessarily call for an MCLR hike, but since we plan to make deposit rates competitive and MCLR is based on incremental cost of funds, we had to raise it.”SBI chairman Rajnish Kumar told reporters after the bank’s Q2FY19 results that the lender had seen a credit growth of 11.11% during the quarter. “We have returned to double-digit growth on the domestic front. Our credit growth is in line with the guidance for 10-12% credit growth for the financial year 2018-19,” he added.Analysts agree that much of the growth in fresh loans is being driven by small-ticket retail loans in the absence of fresh investments by corporates. In a recent note, Kotak Institutional Equities said the medium-term outlook for corporate loan growth remains weak, given the ongoing deleveraging of large corporate borrowers and lack of large-ticket capex.A large amount of corporate bonds have moved to the money markets in the recent years. In FY19 (April-October) the corporate bond issuances totalled to `2.31 lakh crore, 38% lower than the issuances to the tune of `3.74 lakh crore in the comparable period in FY18. In October `39,014 crore was raised by way of corporate bond issuances, 38% higher than the issuances of `28,372 crore in September. Private placements accounted for nearly 98% share of the issuances (`38,207 crore), while public issuances amounted to `807 crore.There has been some revival in November when issuances totalled `55,214 crore, up 8.57% year-on year and higher by 73.12% than `31,893 crore mopped up by firms in October. Total amount raised during April-November, `2.94 lakh crore, is 31% lower y-o-y, as per depository data. The spreads on the 10-year AAA-rated corporate bonds have widened for three consecutive months since September. Net issuances in the September quarter were positive at `4,519 crore after negative net issuances of `16,920 crore in the June quarter.Get live Stock Prices from BSE and NSE and latest NAV, portfolio of Mutual Funds, calculate your tax by Income Tax Calculator, know market’s Top Gainers, Top Losers & Best Equity Funds. Like us on Facebook and follow us on Twitter.

LIC-IDBI Bank deal gets RBI approval – The Financial Express

LIC-IDBI Bank deal gets RBI approval – The Financial Express

The Reserve Bank of India (RBI) has given its approval to the LIC-IDBI Bank deal and the stressed bank is learnt to have received around Rs 6,000 crore from the insurance behemoth as the first instalment for the proposed acquisition of a majority stake, sources told FE.LIC-IDBI Bank deal gets RBI approvalThe Reserve Bank of India (RBI) has given its approval to the LIC-IDBI Bank deal and the stressed bank is learnt to have received around Rs 6,000 crore from the insurance behemoth as the first instalment for the proposed acquisition of a majority stake, sources told FE.Since the government and other regulators like Sebi and Irdai have already cleared the deal and the Delhi High Court this week rejected a plea by All India IDBI Officers Association against the move, the stage is set for LIC to complete its acquisition of up to 51% in the bank this fiscal itself, they added. The total value of the deal is expected to be around Rs 12,000-13,000 crore.“RBI has deemed LIC fit and proper to run a bank,” said one of the sources. An email sent on Wednesday to both IDBI Bank and LIC on the insurer’s first instalment of money transfer remained unanswered until the paper went to press.Thanks to LIC’s acquisition and consequent infusion of money, the government won’t have to provide more capital this fiscal for IDBI Bank, which had received the highest amount of infusion in FY18, said a senior official. This leaves the scope for some other stressed banks to get more government capital from the proposed infusion of `65,000 crore this fiscal.Already, IDBI Bank said on Tuesday that it has received final letter from LIC for an open offer to acquire additional 26% in the lender.The Cabinet Committee on Economic Affairs had in August approved the deal. Once the acquisition is completed, LIC —which held 7.98% in IDBI Bank prior to the deal — will have control of the state-run lender and get the status of a promoter. The government, which held 85.96% in IDBI Bank as of June 30, will see its stake diluted to around 44%, finance ministry officials had said earlier.Get live Stock Prices from BSE and NSE and latest NAV, portfolio of Mutual Funds, calculate your tax by Income Tax Calculator, know market’s Top Gainers, Top Losers & Best Equity Funds. Like us on Facebook and follow us on Twitter.

Essar steel exposure: RBI allowed banks reprieve on 100% provisioning in Q2 – The Financial Express

Essar steel exposure: RBI allowed banks reprieve on 100% provisioning in Q2 – The Financial Express

Lenders may repeat request for December quarter if the account does not get resolved in Q3 or, at least, in early JanuaryEssar Steel exposure: RBI allowed banks reprieve on 100% provisioning in Q2The Reserve Bank of India (RBI) had allowed banks a dispensation from maintaining 100% provisions against their exposures to Essar Steel in the July-September quarter, two senior bankers said. The regulatory relief had been granted on a joint request from banks, who were expecting a full resolution in the account during the October-December quarter.A similar request may be made again for the December quarter if the account does not get resolved in Q3 or, at least, in early January.“This was a dispensation given specifically for Essar Steel because ArcelorMittal’s bid had been approved by the CoC (committee of creditors),” an executive with a large public-sector bank (PSB) said. “We will wait to see what happens in December and then take a call on making another request.”State Bank of India (SBI) had referred Essar Steel to the National Company Law Tribunal (NCLT) under Section 7 of the Insolvency and Bankruptcy Code (IBC) in 2017. Thereafter, the company, which owed banks `44,397 crore at the end of March 2017, has seen furious bidding activity as well as a high level of litigation.As per the RBI’s July 2014 prudential norms on income recognition, asset classification and provisioning pertaining to advances, assets which remain in the ‘doubtful’ category for more than three years attract provisioning to the extent of 100%, or the entire exposure of a bank to the account. In Essar Steel’s case, this milestone was crossed in Q2 of FY19.In order to avoid taking a large provisioning hit on account of their exposure, some banks, such as Bank of Baroda (BoB), have already sold their share of loans in Q2. Another large lender, Bank of India (BoI), ran an auction process for its exposure, but eventually chose to hold on to it while setting aside 100% in provisions, as prescribed by RBI norms. “So when the resolution happens, we will get a writeback,” a senior executive at BoI said.SBI had also considered palming off its chunky exposure to Essar Steel, but changed track in September, following a sooner-than-expected National Company Law Appellate Tribunal order. On October 19, the CoC for Essar Steel declared ArcelorMittal as the highest bidder for the company, preferring them over Anil Agarwal’s Vedanta Group.Get live Stock Prices from BSE and NSE and latest NAV, portfolio of Mutual Funds, calculate your tax by Income Tax Calculator, know market’s Top Gainers, Top Losers & Best Equity Funds. Like us on Facebook and follow us on Twitter.

Govt’s Rs 150-cr relief won’t take edge off onion farmers’ woes in Maharashtra, says APMC chief – The Financial Express

Govt’s Rs 150-cr relief won’t take edge off onion farmers’ woes in Maharashtra, says APMC chief – The Financial Express

According to marketing department’s principal secretary, Anoop Kumar, the cabinet approved an ex-gratia payment of Rs 200 per quintal rate for onion sold between November 1 and December 15.Govt’s Rs 150-cr relief won’t take edge off onion farmers’ woes in MaharashtraFarmers in Maharashtra are staring at stocks of unsold summer onions at the fag end of their shelf lives. Although, the Maharashtra cabinet has approved Rs 150 crore as relief to onion farmers who had to sell their produce at low prices, they do not seemto be very happy.According to marketing department’s principal secretary, Anoop Kumar, the cabinet approved an ex-gratia payment of Rs 200 per quintal rate for onion sold between November 1 and December 15.The compensation will cover a total of 75 lakh million tonne (MT) of onions. Summer onions, however, are selling at `150 per quintal and because of the availability of old stocks of onions, new kharif crop is not getting the desired prices and are selling at `500 per quintal, Jaydutt Holkar, chairman, Lasalgaon Agriculture Produce Market Committee (APMC) said.On Thursday, modal onion prices were selling at Rs 550 per quintal at Lasagaon with the minimum prices at `100 per quintal while maximum prices were at `925 per quintal. Arrivals were `11,800 per quintal. On Wednesday, while arrivals were heavier at `18,100 per quintal and modal prices were slightly better at `650 per quintal. Minimum prices were at `150 per quintal. The situation was similar on Tuesday.According to Holkar, the grant of `200 per quintal was too meagre for farmers and would not even help them meet production costs.“Farmers held on to their stocks before Diwali in anticipation of an increase in prices as in the season of 2017-18 when the government of Madhya Pradesh had purchased onions at `800 per quintal under the Bhavantar Bhugtan Yojana as support to farmers.Moreover, drought in Maharashtra also led farmers to believe that the prices could go up. But, none of this happened and arrivals began in full swing from the neighbouring states of Madhya Pradesh and Karnataka that saw a drop in demand for onions from Maharashtra,” he explained.Last week, a delegation from Maharashtra led by Lasalgaon APMC had sought a minimum support price for onion and implementation of the Bhavantar Bhugtan scheme for farmers.Holkar had pointed out farmers have stocks of nearly 2.5-3 lakh tonne of the summer crop and therefore arrivals are the tune of 15,000 tonne on a daily basis. New kharif onion is also being harvested and arrivals are beginning to pick up causing a glut in the market, he had stated.Traders from the North and the South instead of picking onion from Maharashtra started buying it from MP and Karnataka, he said, pointing to the logistical advantage which cuts their transport cost and resulting into cheaper onion prices to customers and more profit for local traders.Get live Stock Prices from BSE and NSE and latest NAV, portfolio of Mutual Funds, calculate your tax by Income Tax Calculator, know market’s Top Gainers, Top Losers & Best Equity Funds. Like us on Facebook and follow us on Twitter.

SEA opposes cut in import of duty on palm oil – The Financial Express

SEA opposes cut in import of duty on palm oil – The Financial Express

The association has also opposed the increase in trading hours for commodities markets as recommended by Sebi.SEA opposes cut in import of duty on palm oilThe Solvent Extractors Association of India (SEA) has opposed any reduction in the duty on import of palm oil since it could be detrimental to the interests of farmers.Addressing its members, SEA president Atul Chaturvedi, said a piquant situation had happened due to the different rates being agreed by the country’s policymakers for palm oil import duties to be levied.“In case of the bilateral treaty with Malaysia, the import duties on crude palm oil (CPO) and Palm olein (Olien) are supposed to be brought down to 40 and 45%, respectively. However, in the case of ASEAN agreement, the same is 40 and 50%. This anomalous situation has the potential of having two different duty structures for palm oil coming into the country effective January 1, 2019,” he said.He said the association had vehemently opposed any reduction in duty as it could harm the interest of our oilseed farmers and could be detrimental in the long run.However, if driven to the wall in terms of duty reduction, the duty differential of 10% minimum between CPO and Olein should be maintained as currently, although the palm refining industry requires minimum 15% differential, he said.“We have met senior government functionaries in this connection and impressed upon them of our concerns,” he added.According to the association, castor seed future markets has seen high volatility in the past two months and sharp rise in prices which would seriously hurt the domestic industry as well as prompt the foreign buyers to explore alternate feedstocks in their industrial processes.“We have urged Sebi (Securities and Exchange Board of India) to take suitable steps to check excessive volatility and ensure smooth operation of the castor contract,” he said.The association has also opposed the increase in trading hours for commodities markets as recommended by Sebi. “We feel the increase in the timing of the exchanges is not in the interest of stakeholders. Moreover, the objective of the exchanges of increasing volumes may also not be met,” he said.Chaturvedi pointed out the concerned ministries in India and China are working to remove the logjam on exports of oilmeals to China.“However, the recent thawing of trade relations between China and USA may queer the pitch and delay decision-making from the Chinese side. Our government would be well advised to keep up the pressure as Chinese market is very valuable for our soya and rape meal exports,” he said.The Food Safety and Standards Authority of India (FSSAI), in an order, said manufacturing and expiry dates are required with regards to crude oil (edible grade).The association has sent a representation that for primary foods like edible oil in bulk or loose form, only the name of food and address of the importer are required whereas for crude oil of edible grade, it is not applicable. The association has sought a reply from the FSSAI.Recently, the FSSAI has also issued notification to regulate the advertising and claims on food products and issued another on amendments on Food Safety and Standards Regulations under which parameters for new oils, such as avocado oils, palm stearin, palm kernel sterin, palm kernel olein and palm super olein, have been defined. Further, the parameters for rapeseed (toria oil), mustard oil have been modified, he informed the association members.Get live Stock Prices from BSE and NSE and latest NAV, portfolio of Mutual Funds, calculate your tax by Income Tax Calculator, know market’s Top Gainers, Top Losers & Best Equity Funds. Like us on Facebook and follow us on Twitter.

SEBI moots sandbox policy for tech firms; what it is, how it will benefit financial markets – The Financial Express

SEBI moots sandbox policy for tech firms; what it is, how it will benefit financial markets – The Financial Express

Capital market regulator Securities and Exchange Board of India (SEBI) is planning a sandbox policy to support technology developments in financial markets. We take a closer look.We will come out with a sandbox policy. We are examining whether any changes in laws are required in terms of its dispensation, SEBI Chairman Ajay Tyagi said.Capital market regulator Securities and Exchange Board of India (SEBI) is planning a ‘sandbox policy to support technology developments in financial markets. We will come out with a sandbox policy. We are examining whether any changes in laws are required in terms of its dispensation, SEBI Chairman Ajay Tyagi said on the sidelines of an event organised by IIM-Calcutta. How will this new policy benefit tech companies?The ‘sandbox’ policy is being planned in order to bolster innovation in the capital markets by technological intervention. Notably, the Sandbox policy will allow companies to test products in a closed environment, a particular geography or among a set of users, before they are allowed roll out commercially meeting all regulations. SEBI Chairman Ajay Tyagi noted that this will enable the tech companies to work on innovations without regulatory changes. He said there had been huge technology interventions in capital markets in the past and it would continue.Also read: PSU Bank recap part 2: Modi govt seeks Parliament nod for additional Rs 41,000 croreSuch a sandbox approach will allow the firms to experiment and test certain innovative products even before filing for approval or registration of the same. Depending on the success of the experiment the respective tech firms companies can then decide whether they would want to go ahead and seek approval for the same. Notably, such an approach will not only promote innovation, but also reduce failures. Interestingly, Tyagis response came in response to a question on the regulator’s view on crypto assets. Currently, Indian regulations do not accept cryptocurrency as a valid currency. According to a PTI report, markets regulator SEBI had sent its officials to foreign countries to study initial coin offerings and cryptocurrencies, a move that aimed at understanding of the systems and mechanisms. Cryptocurrencies are digital units in which encryption techniques are used for trading and these ‘currencies’ operate independently of a central bank, while initial coin offerings are equivalents of initial public offerings in stock markets.Get live Stock Prices from BSE and NSE and latest NAV, portfolio of Mutual Funds, calculate your tax by Income Tax Calculator, know market’s Top Gainers, Top Losers & Best Equity Funds. Like us on Facebook and follow us on Twitter.

Maharashtra mills get notice over non-payment of cane dues – The Financial Express

Maharashtra mills get notice over non-payment of cane dues – The Financial Express

According to the officials, millers have paid up only Rs 360.36 crore to farmers till December 15 and the total payable FRP was to the tune of Rs 2,497.41 crore by the end of November.Maharashtra mills get notice over non-payment of cane duesAt least 15 sugar mills in the Kolhapur division of Maharashtra have been issued notices by the deputy district registrar for their failure to pay fair and remunerative price (FRP) dues to farmers for the season of 2018-19, senior officials of the Maharashtra Sugar Commissionerate revealed.According to the officials, millers have paid up only Rs 360.36 crore to farmers till December 15 and the total payable FRP was to the tune of Rs 2,497.41 crore by the end of November.Maharashtra’s sugar season officially commenced on October 20 but a few mills were crushing then and the season began in full swing after Diwali in November.Nearly two months have lapsed and as per the Cane Control Order, it is binding on the mills to make cane payments to farmers after 15 days from the start of crushing.Millers, however, have been struggling to sell sugar with prices hovering around the minimum floor price (MFP) of `2,900 per quintal.Sugar millers from Maharashtra have been seeking a financial package from the state government to pay their fair and remunerative price (FRP) dues to cane farmers on the lines of packages declared by the Uttar Pradesh, Haryana and Punjab governments.Sharad Pawar, chairman of the Vasantdada Sugar Institute, at an event in Pune had sought a package of `500 crore from the state government.According to Pawar, the state has seen bumper production because of which sugar prices are falling down. If this situation continues, it will be difficult for sugar factories to make payments to farmers, he had warned.Sugar prices are in the range of `2,900 per quintal whereas the cost of production is `3,300 per quintal which means that farmers have to bear a loss of `400 per quintal, he had said. Therefore, instead of export subsidy or transport subsidy, the state government should come forward and help with a package to help pay FRP, he said.Maharashtra Chief Minister Devendra Fadnavis, however, remained non-committal, stating that the government was sympathetic to the concerns of farmers and understood that the international market decides the prices.He said the government would soon call for a meeting with representatives of sugar sector to take a midterm review and would do what was best for the industry.He said he had written to the government, seeking a raise in the MFP of sugar to `3,100 per quintal. Millers however pointed out this may not be possible.Mukesh Kuvediya, secretary general, Bombay Sugar Merchants Association, pointed out the demand was on the lower side because of winter and lesser demand for soft drinks and icecreams. Barring Christmas at the end of the month, there are no other festivals and since the government has released an adequate quota of 19.5 lakh tonne, the demand-supply situation has been maintained, he had said.Millers in Maharashtra still owe farmers `77 crore in FRP payments for the last season of 2017-18. According to senior officials in the Maharashtra Sugar Commissionerate, some 27 revenue recovery certificate orders had been issued by the authorities of which 10 RRCs are still pending. Millers in Marathwada region have begun paying farmers in instalments since they are unable to make the payments in full at this point.This sugar season of Maharashtra commenced with an opening stock of some 40 lakh tonne.The state is expected to crush some 1,040 lakh tonne of cane and produce nearly 85-90 lakh tonne because of the drought situation and the impact of white grub disease. In Maharashtra, 178 sugar mills are in operation and have produced 29 lakh tonne till December 15, 2018, as per figures released by the Indian Sugar Mills Association (Isma).Get live Stock Prices from BSE and NSE and latest NAV, portfolio of Mutual Funds, calculate your tax by Income Tax Calculator, know market’s Top Gainers, Top Losers & Best Equity Funds. Like us on Facebook and follow us on Twitter.