Over 170 cooperative sugar factories in Maharashtra which contribute 45% to the country’s sugar production, in a serious bid to tackle the possible slide in sugar prices, plan to go in for futures trading through National Commodity & Derivatives Exchange (NCDEX).
The decision in this regard was taken at the meeting called for the federation of cooperative sugar factories in Maharashtra chaired by state finance minister Jayant Patil here on Monday.
The move is crucial when there has been strong demand from the UPA alliance partners to ban the future trading in agriculture commodities. However, the immediate provocation for cooperatives to explore futures trading is fastly reducing sugar prices at the global and domestic markets. They feat that the prices would further reduce in next six months after the centre creates a buffer stock of 20 lakh tonne which would be further increased to 50 lakh tonne.
State agriculture minister Balasaheb Thorat told FE that sugar units will benefit from the futures trading as it is a price discovery mechanism. A veteran cooperative leader Shivajirao Patil however cautioned that cooperatives would have to be properly trained.
Prakash Naik Navre, managing director of the Federation hoped that cooperatives should at least sell 25-30% of their quantities in futures to protect further slide in the sugar prices in addition to the losses.
