Prompted by a reduce in sugar rates under the minimum help value (MSP) of Rs 3,one hundred per quintal, the Department of Food and Public Distribution on Friday directed sugar commissioners, MDs and CEOs to monitor sales and make certain that mills do not sell sugar in the domestic marketplace under the MSP.
The government has warned that if any mill fails to comply with this path, the excess quantity sold along with an extra quantity decided by the directorate would be deducted from the month-to-month release quota from March 2021. Further needed action will also be taken against such sugar mills.
Prices are at the moment in the variety of Rs 2,980 to Rs 3,050 per quintal for S-grade and Rs 3,one hundred per quintal for M-grade sugar.
Mukesh Kuvediya, secretary basic, Bombay Sugar Merchants Association, stated rates are low as demand is poor for the reason that of the winter and absence of any festivals. Crushing is in complete swing and millers have to dispose of stocks to make cane payments to farmers. Moreover, the container shortage is also hampering exports, and for that reason millers are facing liquidity challenges, he stated.
The Department of Food and Public Distribution has sought strict compliance of month-to-month stock holding limit orders issued by the Directorate of Sugar and Vegetable Oils for the domestic marketplace. In a note written to sugar commissioners, the Joint Secretary of Sugar stated the MSP was introduced to avoid money loss to sugar mills and month-to-month stock holding limit is getting imposed to sustain a demand-provide balance in the domestic marketplace.
He stated the limit of sales/dispatch for all sugar mills is determined by properly-defined and uniform criteria based on stock held by the mills along with incentive offered on diversion of sugar to ethanol and export. The objective of the stock holding limit is to make certain a level playing field for all sugar mills, he stated.
The stock limit is getting imposed in such a manner that release of sugar from the mills is restricted to the extent of consumption requirement of the nation so that the sugar value remains steady at a affordable level, he stated.
Officials stated that promoting sugar under MSP in the domestic marketplace and in excess of the month-to-month quota allocated to mill would hamper the methods taken by the government for the industry’s survival and might outcome in accumulation of cane value arrears of farmers.
Many mills in Maharashtra and Karnataka have reported distress sales of sugar under the MSP.
Prakash Naiknavare, director basic of the National Federation of Cooperative Sugar Factories, termed the move as the ideal step in the ideal path in the ideal time. “Low sugar prices are a cause of concern for all, and this step will put a stop to unethical practices. Significantly, while sugar prices have fallen below MSP, the retail prices remain unchanged. Normally there is gap of Rs 6-7 per kg in the ex-mill price and retail product. If the ex-mill price is Rs 31 per kg then the retail price should be around Rs 38 per kg. The retail price includes GST and commissions of the wholesaler, retailer and stockist. Obviously, someone is benefiting from this,” he stated.