With the rollout of GST, demand for sugar has gone up in Maharashtra with most mills working on the switchover to the new system. Mills in Maharashtra have raised prices by Rs 40-50 per quintal over and above the 5% GST on the back of short supply in the markets, according to traders. Barely 10-12 trucks of sugar arrived in the market on Monday compared to the daily arrivals of around 70-80 trucks, according to the Bombay Sugar Merchants Association (BSMA). One truck carries almost 10 tonne of sugar. Mukesh Kuvedia, secretary general of BMSA, said that only a few mills that have switched over to the new system have begun sugar deliveries, leading to a shortage in the market.
Most of the traders have the new GST numbers but the mills are still in the process of shifting to GST. On Monday, sugar prices for M-30 grade were Rs 3,800-3870 per quintal plus 5% GST and that of S-30 grade were at Rs 3,700 per quintal plus 5% GST. According to marketmen, fall in supplies from mills amid brisk demand from stockists and bulk consumers such as soft drink makers and icecream manufacturers had led to the uptrend in prices.
Wholesale traders had reduced sugar purchases in June due to uncertainty about cess and claim there is a shortage in the supply chain. “In the old system, traders were paying Rs 195 per quintal and in the new system, traders will end up paying Rs 185-190 per quintal to millers. However, millers have increased base rates by Rs 40-50 per quintal,” he said.