A section of the sugar industry has sought government intervention to maintain ex-factory prices at a fair level so that it did not fall below the cane purchase prices to prevent a huge outstanding of arrears for the growers.
They have also sought creation of a buffer stock to stabilise prices in case of production shortfall and allocation to factories having production below five lakh quintals per year from it.
Former president of Indian Sugar Mills Association (ISMA) O P Dhanuka said there was a need to maintain ex-factory prices level at Rs 3,900 per quintal.
He said that sugar prices had been falling steadily from Rs 3,835 per qunital in September 2017 to Rs 3,150 per quintal in February 2018 owing to dumping of entire supplies by big factories, when the government came out with an order that the factories would be allowed to sell only 18 per cent of their stock and carry the rest as inventory for subsequent sales.
Dhanuka, also the CMD of Riga Sugar, said that this move had helped the ex-factory prices to climb upwards to Rs 3,550 per quintal since then.
"We want the government to maintain this system of limited release by the factories so that the ex-factory prices steadies at around Rs 3,900 per quintal. I have also written a letter to Prime Minister Narendra Modi in the regard," he told reporters here today.
He also said that annual consumption of sugar in India was around 245 lakh tonnes per year, whereas the domestic production was lower at 203 lakh tonnes, the gap met through imports which got banned from 2015.
Dhanuka also said that there was need for creation of a buffer stock of 20 lakh MT to stablise prices and higher quota for low-producing factories so that they were able to survive in times of crisis.
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