Sugar traders slam move to impose stockholding limit

By: |
Pune | Published: April 27, 2016 5:21:23 AM

Seek import of 10-15 lakh tonne to create buffer for new season

Sugar traders in Maharashtra are not happy with reports of the Centre imposing a ceiling on stockholding to curb rising prices. In a memorandum submitted to Prime Minister Narendra Modi, the Bombay Sugar Merchants Association (BSMA) pointed out that this may be a short-term measure as witnessed in the case of rising prices of tur dal. The association has sought import of 10-15 lakh tonne of sugar so that the stock available will act as a buffer for the new season. The association has also sought a meeting with the PM to apprise him of the market situation.

Ashok Jain, president, BSMA, said that the government needs to take a long-term view of the situation, instead of a knee-jerk reaction, and traders should be taken into confidence before such measures are announced.

“The production season for the current year is almost coming to an end and the stock levels are said to have pegged at 237 lakh tonne as on March 31, 2016. By the time the season ends, estimations are pegged to touch 256 lakh tonne. The association is of the view that the worst is behind us, with 12 lakh tonne already said to have been dispatched to overseas markets. Drawing attention to the next season is now important. We have been noticing weather uncertainties and drought situation across the country which is not very encouraging. Next year again seems to be challenging. Prices have been under much pressure in the past two months and ex-mill prices have touched R36,000 per tonne. Millers have received healthy and much-needed remuneration — both in domestic and export fronts and now there is much need to look at the scenario from views of consumer,” he said. The BSMA is a 75-year-old body with a strong foothold in the APMC market of Navi Mumbai, and the sugar trade of Mumbai and surrounding markets.

Jain suggested that the export of sugar must be stopped immediately. “Keeping in view the domestic consumer, we are of the opinion that export policies for the sweetener should now be stricter, keeping in mind the larger interest of the domestic stock levels for the coming season. Futures trades of the sweetener on bourses are now raising their ugly head of volatility which is not needed and is creating unrest. Necessary measures to curb unnecessary speculation need to be implemented at this stage to prevent a very uncomfortable situation before things go out of control. We are still in a comfortable zone but at cautious point,” he said. Action needs to be taken now and export of sugar must be stopped immediately, he added.

According to Jain, the government is likely to impose a ‘stock limit’ to curb rising prices. “However, this could only be a short-term measure, as we have witnessed in tur dal. Now again, tur dal prices have gone up. Futures trading must be suspended till adequate sugar stock is available in the market,” he said.

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