Indian sugar mills association

Sugar rates increase in wholesale markets, mills get no benefits

Date:	07 Jan 2016

Source:	The Economic Times

Reporter:	Jayashree Bhosale

News ID:	5127

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PUNE: Sugar millers and farmer bodies in Maharashtra say largescale speculative trading has pushed sugar prices up but this has brought no gains to millers or farmers. Sugar prices have jumped about 10% in the wholesale markets over the past two weeks. Swabhimani Shetkari Sangathana, the main organisation representing cane farmers of Maharashtra, said it has appraised Union Finance Minister Arun Jaitley about the sudden spurt.

"A handful of traders and corporates have been driving the sugar prices up, while mills have been claiming that there is no demand and expressing inability to pay the mandatory fair and remunerative price (FRP) of cane," Raju Shetty, leader of Swabhimani Shetkari Sangathana, said in a letter to Jaitley. Spot price of sugar in Kolhapur has risen to Rs 30 per kg from about Rs 28 on December 20.

"Buying from mills was good when prices were Rs 27-28. Now that prices have gone up to Rs 30, there is no sugar demand from mills," said the managing director of a sugar co-operative in Kolhapur. "We were expecting a sustained rise in prices and hoping the Rs 30 rate in February." Prices at the wholesale markets in Mumbai and those quoted by mills are at the same level, which indicates that hoarders are bringing old stock to the market, industry executives said. "Sugar prices at the Vashi market are almost the same as being quoted by mills," said Ashok Jain, president of Bombay Sugar Merchants' Association.

"The rise in sugar prices on NCDEX has affected wholesale prices." The state has allowed mills to pay only 80% of the FRP as the first installment but mills say high prices will not help them pay FRP. "We are not able to sell enough sugar. There is no demand. We are not getting the benefit of the rise in sugar prices as speculators are bringing the sugar they had bought at lower rates," said Shivajirao Nagawade, chairman, Maharashtra State Federation of Co-operative Sugar Factories.

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