In a bid that could escalate sugar prices further to set another lifetime record, importers from Uttar Pradesh have turned down the offer of Maharasthra Sugar Federation to supply raw sugar imported from Brazil.
Prakash Naiknavare-led, Maharashtra State Federation of Co-operative Sugar Factories (Sugar Federation) had sent proposals to nine raw sugar importers based in Uttar Pradesh about a fortnight ago to supply 2 million tonnes of raw sugar which is lying at Mumbai Port and JNPT to refineries in Maharashtra on a 75:25 remuneration basis.
The managing director of Sugar Federation had offered 75 per cent of the profit to the importing sugar mills while the remaining 25 per cent was to remain with refineries in Maharashtra.
However, Naiknavare without naming these companies told Business Standard that about nine companies, who had imported raw sugar, are now not keen to supply to sugar mills due to the current global price of $730 a tonne against $400-450 a tonne at which they had imported. In fact, these importers may prefer to wait till the price reaches $800 a tonne.”
These importers have kept the imported raw sugar in SILO, a storage facility at the Mumbai port to maintain its quality.
Understandably, leaders like Bajaj Hindusthan, Simbhaoli Sugars, have imported raw sugar for processing in their refineries in Uttar Pradesh.
The quantity is lying at ports in Maharashtra for months as the Mayawati government in Uttar Pradesh has banned entry of imported raw sugar into the state territory, due to higher realisation for farmers’ sugarcane.
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Sugar cooperatives, who see the state production to be at around 4.8 million tonnes by the end of the current season, wanted to use the raw sugar to further increase the sugar output in the state.Meanwhile sugar prices are skyrocketing to set the lifetime benchmark at Rs 42-43 a kg in Tier-III retail market which the farm minister Sharad Pawar had estimated to touch even Rs 50 a kg. In the last one year, sugar prices have almost trebled.
Total output in India is estimated to be at 16 million tonnes this season as against consumption of 23.5 million tonnes. Last year the country’s total output was at 14.7 million tonnes.
Since cane availability is inadequate compared to crushing capacity, the blending of raw sugar along with cane for crushing is the need of the hour and more importantly necessary for keeping the financial health of the industry safe, Naiknavare said. The Union government, meanwhile, is considering extension in the deadline for tax-free white sugar imports till December, for the second time in less than a year.