Maharashtra co-operative sugar mills are facing a unqiue problem of rapidly falling prices mainly due to sharp increase in non-levy sugar releases for January and deferment of exports. Sugar prices have crashed by Rs 300 a quintal as the current ex-mill non-levy sugar realisation is in the range of Rs 2,550-2,600 a quintal and factories have gone into short margins.
Co-operative mills, which recently arrived at a settlement with various farmer unions on the payment of first advance, warned that if the present crash in prices continue it would further hamper the cane payment to the farmers leading to socio-economic instability amongst the farming community.
Vijaysinh Mohite-Patil, chairman of the Federation of Cooperative Sugar Factories in Maharashtra, a representative body of over 150 mills, told Business Standard, “ Centre has issued 1.7 million tonnes of non-levy quota for January against 1.1 million tonnes last year at the national level. In case of Maharashtra, sugar mills have received .67 million tonnes of non-levy quota for January compared to .37 million tonnes of last year. The market will not be able to absorb this and would further lead to crash in sugar prices. I will take up the issue with the minister of agriculture, food & civil supplies Sharad Pawar on Friday.” He noted that factories would not be able to sell and deliver the entire January non-levy sugar quota by the month-end.
“If the unsold non-levy sugar quota is converted into levy sugar the factories would receive huge financial setback and thereby severely affect the cane payments,” Mohite Patil said.
Mohite-Patil said he would make an appeal on behalf of co-operative mills to Pawar that the time limit for sale and delivery of non-levy quota for January be extended at least by three weeks. Besides, he added they would appeal to release moderate non-levy sugar quota of 1-1.1 million tonnes for the month of February for national level. This would enable the factories to recover the cost of production.
Federation official informed that the percentage of non-levy sugar quota is between 10-12 per cent of the sugar stock. However, in January the non-levy sugar quota released by the Centre was in far excess of the conventional percentage which should have been rational and in relation to the stock position.
The Maharashtra Sugar Merchant & Brokers’ Association would also take up the similar issue with Pawar. Association’s Founder President Yogesh Pande said “The non-levy sugar quota has almost been doubled in Maharashtra. There is large amount of unlifted stock in mills due to lack of demand. We will appeal to the ministry to extend the validity of January non-levy quota.” On the Centre’s decision to put on hold export of .5 million tonnes, Mohite-Patil and Pande suggested that there should be stability in decisions with regard to sugar exports and imports.
