Maharashtra: Sugar prices drop again on lower demand

By: |
Pune | Updated: September 6, 2019 3:06:37 AM

The Centre’s recent export subsidy of `1,048 per tonne is expected to help sugar industry across the country, including Maharashtra.

sugar, sugarcane plantation, maharshtra sugarcane farmers, sugar mill Maharashtra, sugar industry MaharashtraThe mills had demanded a higher quota of around 20 lakh tonne while the government capped it at 19.5 lakh tonne.

According to Mukesh Kuvediya, secretary general, Bombay Sugar Merchants Association ( BSMA), prices were flat in Mumbai because of demand-supply parity. “Traders are buying as per demand because of the red alert issued by the weather department both in Mumbai and Kolhapur. They do not wish to be stuck with stocks which may get wet due to rains. Moreover, there are no festivals in September leading to a poor market sentiment,” he said. People have already made their purchases at the start of the month when the Ganesh Chaturthi festival began and now there is not much demand ahead of the fortnight-long Shradh period, he pointed out.

On Friday, prices of S-grade in Vashi were `3,340-`3,380 per quintal and M-grade at `3,475 to `3,610 per quintal. Kuvediya felt that prices are likely to remain flat during the month. Prices had gone up after the government set a lower-than-expected sale quota for mills in September. The mills had demanded a higher quota of around 20 lakh tonne while the government capped it at 19.5 lakh tonne. A record carry-over stock of 145 lakh tonne is also likely to impact prices in the long term, industry people said.

As per state sugar commissioner’s estimates, total area under sugarcane cultivation in 2018-19 was 11.65 lakh hectare, dropping to 8.43 lakh hectare in 2019-20. At the beginning of the monsoon, the commissionerate had predicted that state’s sugar production may drop from around 64 lakh tonne to around 52 lakh tonne owing to drought in Marathwada. However, floods in August destroyed nearly 1.1 lakh hectare of crop in western and southern parts of the state. The Centre’s recent export subsidy of `1,048 per tonne is expected to help sugar industry across the country, including Maharashtra.

As per the latest crushing report issued by the Maharashtra Sugar Commissionerate, sugar millers owe farmers `470.75 crore in Fair and Remunerative Price ( FRP) payments , around 60% of the dues for the season of 2018-19. During the season, around 195 factories crushed some 952.11 lakh tonne of cane to produce 107 lakh tonne of sugar. The total payable FRP was `23,203.16 crore of which factories have paid `22,832.88 crore ( 98.40%) .

Around 56 factories have FRP dues and 139 factories have made 100% FRP payments, 36 factories made 80-99% dues, 10 factories made 60-79% payments and 10 factories made payments below 59%. During the season 79 Revenue Recovery Code ( RRC) orders were issued to 60 factories.

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