Mumbai: Expecting record break bumper production of sugar this year, it may turn out to be the bane of panic-stricken sugar industry. To incur the loss or gap of Rs 3.50 to Rs 4.50 per kilogram as compared to its production cost, Maharashtra State Co-operative Sugar Factories Federation Ltd — the apex body of sugar mills and Indian Sugar Mills Associations (ISMA) — has demanded to increase the minimum sugar price from Rs 29 to Rs 36 per kilogram. If the demand will be approved by the Centre, the sugar price may cross Rs 45 to Rs 50 per kg during Diwali.
Though the union government has allowed to export 50 lakh tonnes of sugar across the country, the industry worries about what to do with additional surplus production. Maharashtra alone will produce 110 lakh tonnes sugar. The sugarcane and the sugar produced in the year 2016-17 was 203 lakh tonnes whereas it has been reached to 320 lakh tonnes in the year 2017-18.
“Due to good monsoon, the sugar production increased by 117 lakh tonnes this year than the previous years. In the year 2018-19, at the end of sugar crushing season which is expected in April 2019, it has been expected that the total sugar production may reach to 355 lakh tonnes, higher than Brazil and it would be a world record in domestic sugar production market,” claimed Sanjay Khatal, Managing Director of Sugar Factories Federation.
The country has already stock of 100 lakh tonnes whereas in-house domestic consumption of sugar is 265 lakh tonnes across the state. If we would expect sugar production of 355 lakh tonnes, more than 190 lakh tonnes of sugar will be surplus even after domestic consumption.
Sugar mill produces white sugar for the domestic market whereas raw sugar for export. According to ISMA, the losses on sugar exports currently are around Rs 11 to 12 per kilogram over the current domestic ex-mill sugar prices. On the other hand, the financial assistance of Rs 5.50 per quintal of sugarcane to pay FRP to farmers covers Rs 7.7 — per kilo of sugar and therefore, this is still a gap or loss of Rs 3.50 to 4.50 per kg sugar.
ISMA has written a letter to union Secretary, ministry of food and public distribution, and demanded to increase financial assistance to export sugar else, increase minimum ex-mill sugar price from Rs 29 to Rs 36 per kg. ISMA claimed, the retail price did not cross Rs 44 per kg during the year 2016-17 when the sugar mills had sold it at Rs 36-37 per kg at the factory gate. Consumers had accepted Rs 44 per kg without any concern or alarm in the market.
Factories Federation too demanded to avail subsidy of Rs 2500 for transport of white and raw sugar from various ports, avail Rs 100 per tonnes for sugarcane crushing, make it mandatory to mills to produce raw sugar for the first two months from the beginning of crushing season, instructs banks to make available soft loan.