Sugar prices likely to remain high

If the view of the Maharashtra sugar cooperatives is anything to go by, there seems to be hardly any relief in the retail sugar price. The sugar price is likely to remain high in 2010 in spite of the government’s endeavors to check the rising prices. Maharashtra’s contribution in the overall sugar production of the nation stands at about 35%.

Managing Director of Maharashtra State Co-operative Sugar Factories Federation, Mr Prakash Naiknavare said "After considering the impact of raw sugar imports and the availability of cane for crushing, we expect prices to range between Rs 35 and Rs 37 a kg till January 2011."

Sugar costs at Rs 3,165 per quintal for the variety of S-30 and Rs 3,275 per quintal for the variety of M-30 are as high as 75% and 80% as against the last year.

The process of cane crushing in the present season was affected twice because of untimely rains in Maharashtra. However, the crushing process in Uttar Pradesh suffered because of farmers’ protests over cane prices.

Naiknavare said, "The crushing season will barely last till March in Maharashtra. We expect to crush 41 million tonnes of cane and with an average recovery of 11.5 per cent, the production is pegged at about 4.8 million tonnes (mt)".

The nation is likely to manufacture 16mt of sugar in this season beginning from November 2009, as against the yearly demand of 23 mt. Sugar production declined to 14.5 mt in the year concluding on September 2009, from 26.4 mt registered during the same period of the last year. On the basis of the median recovery of 11.52% previous year, the Maharashtra Government approved a Fair and Remunerative Price (FRP) of Rs 1,575 per tonne for the period 2010-11. The FRP is about 46% more than the last year’s statutory minimum price of Rs 1,077 per tonne.

In 2009-10, the Maharashtra millers declared the median first advance of Rs 450 per tonne higher than the FRP. He said, "For sugar season 2010-11, Maharashtra is expected to crush 52.5 million tonnes of cane and produce six million tonnes of sugar".

The Hindu Business Line

December 24, 2009