Sugar prices have moved up by `20-30 per quintal on Friday on speculation that the government of Uttar Pradesh seems to favour a 12% possible price rise in the minimum floor price (MFP) of the sweetener. The outlook, however, does not look very promising with a continued weak demand in the market and reports of good sugar production.
In the absence of demand, millers have been finding it difficult to make fair and remunerative price (FRP) payments to farmers, and several mills in Marathwada and Vidarbha region in Maharashtra have begun making 80% of FRP payments to farmers.
According to Mukesh Kuvediya, secretary general, Bombay Sugar Merchants Association, prices have moved up marginally on Friday on rumours of a possible rise in MFP. Prices were `2,900-2,920 per quintal for S grade and `2,970-3,030 per quintal for M grade.
December had not seen much pick-up in the market because there were no festivals and traders had not been buying, he said. “Demand has been poor in the absence of festivals. Moreover, there are reports of a good production by millers in the market which has added to weak sentiment.”
Internationally as well, prices had decreased to 11.95 cents to 12 cents per pound from 14 cents per pound in November 2018, he said. This could impact exports since internationally, the sentiment is weak, Kuvediya pointed out. The government has mandated a quota of 50 lakh tonne and a distance-based transport allowance has been announced to boost exports.
According to BB Thombare, president, Western India Sugar Mills Association (Wisma), in the absence of demand , stocks have been lying unsold with millers and there have been no takers for tenders floated by millers.
Millers have been unable to make FRP payments to farmers because of low prices and unsold stocks. Several mills in Marathwada and Vidarbha have paid 80% of FRP to farmers till December 15, 2018. In Maharashtra, mills had paid `1,469.5 crore of the total
`5,026-crore dues until December 15, or about 29% of the current year’s arrears. Raju Shetti, leader of farmer outfit Swabhimani Shetkari Sanghatana, has been demanding FRP payment in a single amount and has threatened to hold a protest at Pune on January 28.