Sugar rates in Maharashtra have fallen under the minimum help value (MSP) of Rs 3,one hundred per quintal since of poor demand, forcing millers to sell under the floor value to be in a position to make cane payments to farmers. A higher opening balance at the start off of the season, delayed export programme which is however to be announced by the government and no selection however on enhance of the MSP are some of the factors getting attributed by traders for the fall in sugar rates.
Demand from industrial buyers such as ice cream and soft drink makers is also sluggish due to the onset of winter, traders stated. The country’s opening stock balance at the start off of the season was about 107 lakh tonne and Maharashtra’s share amounted to some 36 lakh tonne, which is adding to the challenge. Sugar mills in the state owe farmers Rs 351.54 crore in fair and remunerative value arrears in the initial month of crushing operations.
Mukesh Kuvediya, secretary basic, Bombay Sugar Merchants Association (BSMA),stated rates for S-grade variety involving Rs 3,070 and Rs 3,110 per quintal although these of M-grade are at Rs 3,160-3,230 in essential markets of Maharashtra. The winter months are commonly lean for the market due to lack of demand from the market, but this time the sluggish marketplace circumstances due to Covid and low-essential weddings are also resulting in a weak sentiment, he stated. There has been a 15-20% drop in consumption in the state.
Manohar Gopal Joshi, MD, Jawahar Cooperative Sugar Factory, stated with Karnataka commencing the season earlier than Maharashtra, the state started providing newly made sugar at MSP. This has left Maharashtra mills positioned close to the Karnataka border with no alternative but to sell their older stocks at decrease rates. Satyajit Sherkar, chairman, Vighnahar Cooperative Sugar Factory, stated the lack of demand has triggered a slide in sugar rates and mills are getting it challenging to sell their stocks.
According to traders, mills in the state have lost most of their standard markets to Uttar Pradesh. Sugar exporter and trader Abhijit Ghorpade pointed out the transportation rates from Uttar Pradesh (UP)to Kolkata are lesser than transportation rates involving Maharashtra and Kolkata. To match the rates supplied by millers in UP, millers in Maharashtra are forced to supply decrease rates than UP, he stated. The case with Rajasthan, Delhi or any other marketplace in the North and East is similar considering that mills in Maharashtra will not be in a position match rates supplied by UP mills. Markets in the south are serviced by mills in Karnataka and Tamil Nadu to some extent, he added.
Ghorpade stated the government demands to be firm and announce choices with regard to the export policy and MSP, or the marketplace will continue to stay beneath stress, he stated. Due to fantastic rains in the state this year, the region beneath sugarcane cultivation has enhanced to 11 lakh hectare and an estimated 873 lakh tonnes of cane will be readily available for crushing. It is anticipated to yield 99 lakh tonnes of sugar. In Maharashtra, 158 sugar mills have began crushing operations as on November 30, 2020, as compared with 71sugar mills which operated in the corresponding date of final year.