| Date: |
15-11-2014 |
| Subject: |
Sugar prices to come down again |
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Lucknow: Sugar prices in UP are likely to fall further. Millers gearing up to start crushing sugarcane by month-end will increase flow of sugar in the open market.
The existing ex-mill price of sugar in UP is around Rs 28.50 per Kg as against Rs 30.20 per Kg last year. Millers are once again all set to fire up their boiler following Akhilesh Yadav government's decision to reduce the first installment of State Advisory Price (SAP) from Rs 260 to Rs 240 per quintal. This would increase the supply of sugar in the market from December. Given the falling demand for sugar in post-festive season, the market is likely to be flooded with sugar.
Industry sources said though no fresh agreement of sugar import has been made, the earlier agreement for sugar inflow, essentially from Maharashtra and Karnataka, will be at play, thereby escalating supply of sugar further.
Principal secretary, cane development, Rahul Bhatnagar said the sugar mills have agreed to start crushing by November 30. A senior office-bearer of UP sugar mill association told TOI that the sugar price trend would thus be on the downslide. Only a couple of days ago a prominent sugar mill in UP sold sugar at Rs 28.30 per Kg.
"Though the stalemate with the state government is over, falling prices of sugar could be a cause of concern for the industry," said an Indian Sugar Mills Association (ISMA) member. He said the industry is also confident of getting loans from banks to get the mills functional.
The reduced prices may, incidentally, burden UP government which has said it would pay part of compensation if prices fall below Rs 31.00 per Kg. This will be decided by a high level committee headed by UP chief secretary after the end of crushing season in April next year.
State cabinet on Wednesday had maintained the SAP at last year's Rs 280 per quintal. This too has been split into two installments of Rs 240 and Rs 40. Of the Rs 40, the state government has already agreed to give subsidy of Rs 20. The quantum of further subsidy, based on prices of sugar, will come through in the bracket of the remaining Rs 20 per quintal.
Farmers, on the other hand, feel cheated with state government decision to lower the first installment of compensation from Rs 260 per quintal to Rs 240 per quintal. Convenor of the Rashtriya Kisan Mazdoor Sangathan V M Singh said the state government may have satisfied millers but it had landed them in deeper trouble. With the millers yet to get over with maintenance of the machines, the farmers, faced with diminished market sentiment, would be forced to sell off their produce at the local jaggery units at an even lower rate. Farmers, already under pressure to clear their fields for wheat cultivation, are selling off their produce to local 'kolhus' at Rs 190 to Rs 140 per quintal.
Source : timesofindia.indiatimes.com
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