The mills are seeking Rs 3,450 per quintal for S Grade, Rs 3,600 per quintal for M Grade and `3,750 per quintal for L Grade.
Sugar prices in Maharashtra have firmed up by around Rs 100 per quintal over the last 10 days amid market speculations of the Centre announcing a possible rise in the Minimum Support Price (MSP). The current MSP of sugar stands at Rs 3,100 per quintal.
Mukesh Kuvediya, secretary general, Bombay Sugar Merchants Association (BSMA) said that prices have firmed up by Rs 100 per quintal due to anticipation among traders about a possible rise in MSP by Rs 1-2 per quintal.
“Food secretary Sudhanshu Pandey last week stated that the government is considering a proposal to increase the MSP of sugar from Rs 3,100 per quintal in order to help millers clear fair and remunerative price (FRP) dues of about Rs 22,000 crore to farmers,” he said.
The Niti Aayog recently recommended a rise in MSP to Rs 3,300 per quintal while industry body Indian Sugar Mills Association (ISMA) has suggested that MSP be raised to Rs 3,500 per quintal to Rs 3,600 per quintal, he said.
The demand for a rise in MSP has also picked up with the Commission of Agricultural Cost and Pricing (CACP) recommending a Rs 100 per tonne rise in FRP.
Maharashtra cooperative mills have sought a grade-wise rise in MSP to counter the dominance of mills from Uttar Pradesh that have captured the entire market.
The mills are seeking Rs 3,450 per quintal for S Grade, Rs 3,600 per quintal for M Grade and Rs 3,750 per quintal for L Grade.
Ex-mill prices in Maharashtra for S-grade are currently at Rs 3,160-3,210 per quintal and Rs 3,250-3,380 per quintal for M Grade in Kolhapur, Kuvediya said.
With the easing of the lockdown, demand from all industry sectors is slowly picking up with restaurants commencing home deliveries and migrant workers coming back to work, he explained.
Demand from the beverages and ice cream sector is still to pick up with the onset of monsoon, he added.
The industry, however, has begun stocking up in anticipation of the hike in MSP, he said.
Kuvediya felt that since the international sentiment is weak, sugar millers would prefer to focus on the domestic market rather than export sugar. The government has allocated a quota of 60 lakh tonne for export in the next three months.
Mills are presently honoring contracts that have been signed earlier, he said.
As per market reports, contracts worth 51 lakh tonne have been signed by millers of which around 46 lakh tonne have already been shipped out.