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  1. Sugar prices soar by Rs 300 per tonne; as mills, traders not hoarding, Centre looks to pin down reason

Sugar prices soar by Rs 300 per tonne; as mills, traders not hoarding, Centre looks to pin down reason

The Centre is concerned over the sugar prices in the country that have risen by at least Rs 300 per tonne in the last fortnight.

By: | Pune | Published: January 26, 2017 4:17 AM
The Maharashtra Cane Commissioner had also called for a meeting of managing directors of sugar mills in the state last week to understand the reasons for the price rise. (PTI) The Maharashtra Cane Commissioner had also called for a meeting of managing directors of sugar mills in the state last week to understand the reasons for the price rise. (PTI)

The Centre is concerned over the sugar prices in the country that have risen by at least Rs 300 per tonne in the last fortnight. At a review meeting of the Cane Commissioners of major sugacane growing states called by the central government on Tuesday, it emerged that mills in Maharashtra have been selling at least 7 lakh tonnes per month which is considered a good sale by most industry experts.The Centre has called for another review next month.

According to Maharashtra Sugarcane Commissioner Vipin Sharma, mills in the state are selling 7 lakh tonnes a month and there is enough stock available to the tune of 45 lakh tonnes in Maharashtra currently. Since the mills are selling, there is no reason to believe that they are responsible for the price rise and even traders in the state are not hoarding sugar as R3,600 per tonne is not considered attractive enough to hoard large stocks, he explained. Maharashtra mills have also paid 94% of the FRP. The Centre had called for the meeting to understand the reasons behind the price rise.

The Maharashtra Cane Commissioner had also called for a meeting of managing directors of sugar mills in the state last week to understand the reasons for the price rise. Millers were asked to give reasons for the hike in prices where they maintained that the prices have not risen artificially but millers were getting these prices. Sharma said the price rise was not because of any shortage since there are ample stocks available in the market.

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Sugar prices have seen an upsurge by more than 5% in January, to be priced at R40 per kg in the wholesale market in Mumbai, as supply is expected to lessen due to cane shortage. There is expectation of lower sugar output as mills in Maharashtra are closing early due to sugarcane scarcity. Till now, there was no such proposition to lower import duty on sugar, but it has been assured that the prices will remain stable.

Mukesh Kuvediya, secretary general, Bombay Sugar Merchants Association, had earlier maintained that sugar production was earlier estimated at 235-240 lakh tonnes to now drop down to 225 lakh tonnes. Maharashtra was expected to produce 60 lakh tonnes of sugar and production is now expected to fall to some 45-50 lakh tonnes, he had said, adding that the reduction in production and cane shortage has spiked up prices.

Moreover, in futures trading, the margins of 65% have gone down to barely 25%, which has again led to a rise in sugar prices, he explained. Retail prices have marginally gone up by R2-2.50 per kg because traders are now bringing out their old stocks for sale to touch R42-43 per kg.

In its latest report, ISMA has also maintained that there is no reason to feel that there is any shortage of sugar in the country or there is need to import any sugar. The association is strongly against any speculation and does not believe in unnecessary spike in sugar prices due to such speculative tendencies on the part of few vested interests.

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