Low prices give bitter taste to sugar trade

Source: The Hitavada      Date: 05 Jun 2018 12:28:08


Business Bureau

Surplus production of sugar in the current season seems to have toppled the sugar trade in the country. While sugar mills are finding it difficult to survive, the sugarcane farmers are reeling under pressure as they are not getting enough income returns. Traders are also expressing concern over the prevailing prices of sugar in the markets that are showing no signs of recovery in near future. Experts in the trade believe that the pricing of the commodity would continue to remain bearish due to huge availability of sugar in the country.

On an average, the country’s annual consumption is estimated at 2.45 lakh tonne to 2.55 lakh tonne of sugar. But in the current season, sugar production has touched the level of 3.16 lakh tonne. Adding to the woes, there was left over stock of about 42 lakh tonne of previous year. Thus the availability of sugar in the country in the current season is 3.58 lakh tonne which is directly affecting the prices. On Monday, S-grade sugar was sold at a price of Rs 3,050 to Rs 3,150 per quintal to city’s wholesale market while M-grade sugar saw price tag in the range of Rs 3,200 to Rs 3,250 per quintal.

Commenting on the pricing, Kirit Panchamatia, former Secretary of Nagpur Itwari Kirana Merchants Association told The Hitavada that the prevailing prices of sugar were causing huge loss to the farmers and sugar mills. “Though the consumers are looking happy, this is not healthy sign for the sugar sector. Farmers are in deep trouble as they are left with no option to sell sugarcane at thrown away prices. Moreover, most of the sugar mills in the country are unable to give payments to the farmers,” he said.
In 2015-16, the production of sugar was at about 2.65 lakh tonne and the prices were in the range of Rs 2,500 to Rs 3,000 per quintal. But in the following year (2016-17) that had witnessed scanty rainfall in many sugarcane growing belts including Marathwada and western Maharashtra regions, the production slipped to a level of 2.05 lakh tonne and prices had shot up dramatically.
This was the period when sugar prices had touched all time high of Rs 4,200 per quintal mark. However in 2017-18, sugar production once again improved to a new high of 3.16 tonne.

Panchamatia said that sugar prices in the international markets were also very weak and thus the country was not able to push it in the foreign markets.Another sugar wholesaler who wished not to be quotedsaid that the Government should make policy changes to support the trade. “We should encourage production of ethanol so that additional market for the commodity could be created. Apart from this, we should also think to create buffer stock of sugar,” he added.