Sugar millers in Maharashtra are concerned with the drastic fall in the prices of the sweetener. According to the Maharashtra State Cooperative Sugar Factories Federation ( MSCSFF), prices have fallen by Rs 350-Rs 400 per quintal in the last 20 days from Rs 3,550 to Rs 3,175 per quintal. Millers say that they are unable to meet the cost of production and therefore it would be difficult for them to pay fair and remunerative price (FRP) to sugarcane growers. Mill owners are also seeking export incentives pointing out that mills in Pakistan have been given export subsidies even as the neighbouring country is likely to export some 15 lakh tonne sugar this season. MSCSFF chairman Shivajirao Nagwade said that the sugar sector is in trouble and if the Centre and state continue to ignore issues that are troubling the millers, the future of the sector is not very bright.

“The cost of sugar is around Rs 2,800-2,900 per quintal and with transportation costs of Rs 230 per quintal, millers barely get some Rs 2,500 per quintal in hand. Moreover, the Maharashtra State Cooperative Bank ( MSCB) has reduced valuations by Rs 120 per quintal to Rs 3,270 per quintal from Rs 3,390 per quintal leaving Rs 2,030 for cane payment. There is a gap of Rs 200-Rs 700 per quintal which has become very difficult to fill,” Nagawade said. There is a lack of demand in the market since traders are not buying much because of the stock limits.

Former state cooperation minister Harshavardhan Patil said that most of the millers have agreed to pay around Rs 2,500-2,600 per tonne as the first cane payment to farmers and this would be difficult in light of the falling prices. This year, Maharashtra’s crushing season started on a stormy note with cane growers taking to the street demanding higher prices for their produce. The Centre has fixed FRP at Rs 2,300-Rs 2,500 per tonne depending on the recovery.

“More than 35 lakh farmers in the state are cane growers, 8.5 lakh labourers are attached to this sector which contributes Rs 50,000 crore in terms of turnover. Millers barely get Rs 32 per kg and interestingly retail prices are still at Rs 40-42 per kg. One needs to investigate where the margins are going,” Patil said. “ It has taken some 13 months for prices to rise from Rs 3,000 per quintal to Rs 3,500 per quintal and 20 days for prices to fall by around Rs 400 per quintal,” he said.

Patil said that given an opportunity, India could export some 20 lakh tonne and with Philippines and Iran banning sugar imports, the market for Indian sugar have become restricted. “Unless the government intervenes, sugar from Pakistan may flood the Indian markets and prices may fall further,” he said, adding that the drastic fall of prices in the domestic markets against the trend in the global markets must be investigated.