I have installed
squid proxy servers and
vsftpd FTP server on 2 separate VMs. How can I Configure squid proxy servers on machines-A (where squid installed)to forward ftp requests to machine-B (where vsftpd installed)
This is not possible with Squid. Squid can do caching but not port forwarding.
Squid is a caching proxy for the Web supporting HTTP, HTTPS, FTP, and more. It reduces bandwidth and improves response times by caching and reusing frequently-requested web pages.
What you need to do is port forwarding using iptables that will forward ftp request on Machine-A to Machine-B.
For FTP proxying you may also try something like this: http://www.ftpproxy.org/