Maharashtra sugar millers lose chance to cash in on rallying global prices
KOLHAPUR: Maharashtra’s sugar millers have lost out on a “rare opportunity” when they could have cashed in on the spiralling prices in the international market. It is after 2004-05 that the global prices have soared over domestic rates.
Mill operators and experts said the sugar prices in the global market have touched Rs 45 per kg, while it is selling at Rs 34-36 per kg in the domestic markets.
However, no sugar mill in the country has any export quota left, they said.
Several mill operators told TO that they were unable to cash in on the rising prices of sugar in international markets as they have exhausted the first quota. They said they were assured of a fresh export quota but it has not materialised yet. They feel that fresh exports are allowed, they will be in a better position to pay off the loans.
Arun Lad, chairman of Kranti Sugar Factory of Kundal in Sangli district, said, “We were promised that the export quota will be sanctioned twice. The first one we have utilised by selling sugar at Rs 29-30 per kg. The second one does not look like it is coming. If more export is allowed now, we can clear our loans and reduce the losses incurred over the past few years.”
The experts from sugar industry said that prior to this, the sugar rates had gone up in the international market in 2004-05. However, that year, the yield of sugar cane and therefore, the sugar production had dipped by 50% in Maharashtra owing to the infestation of white leaf disease.
Vijay Autade, senior sugar industry expert, said, “The thumb rule is that the country should have nearly 55 lakh tones of sugar as buffer stock. It is the situation at present. For the last few years, the buffer stock was more (60 LT in 2022, 75 LT in 2021 and 100 LT in 2020).”
He also said that the annual demand in the country is 260 lakh tonne and considering normal monsoon, there will be neck-to-neck condition of demand and supply. Already, the sugar prices in domestic markets have seen an uptick.
Considering all these conditions, the government is unlikely to allot quota.
Semal Jain, Kolhapur based sugar exporter, said, “The prices of sugar have shot up by Rs 200 per quintal in last ten days. Currently, the factories get Rs 3,200 to R 3,500 per quintal. The prices at the domestic level have to be stable and available buffer stock gives an assurance of that.
However, monsoon and the period after needs to be watched closely.” The production of sugar has dipped mainly due to the untimely rain in September and October last year when the sugar cane needs clear weather to mature. “This year, the sugar diversion to ethanol too has increased.
Last year, it was 12 lakh tonne and it is 17 lakh tonne this year. This is due to permissions to set up more distilleries and increasing capacity of the existing ones,” said Autade.
Lad said that the government should increase the minimum selling price (MSP)
by few rupees to ensure that the millers plug the losses caused due to restrictions over the exports. “The sugar MSP is at Rs 32 per kg for the last several months.
Rising it further will help get the loans over the stock to bear the operational expenses for next season,” said Lad.
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