Sugar Import Hurts Industry, Prices Down

The Centre's decision to import five lakh tonne raw sugar and a bumper crop in Uttar Pradesh have triggered a price slide in the sugar bowl of Maharashtra.

The selling prices at sugar factories in Kolhapur have declined from from Rs 3,650 to Rs 3,550 in just a week. This year, the sugar cane crushing was particularly low due the drought last year and the sugar factories shut down much earlier than usual.

On April 5, the Union government took the decision to import five lakh tonne raw sugar to keep a check on the prices in domestic market. The decision changed the sentiments in the domestic market and traders stopped purchasing sugar from Kolhapur. In the meantime, the bummer production in Uttar Pradesh has led to a decline in demand from northern states.

Sugar expert P G Medhe told TOI the government's decision to import sugar has changed the sentiments in market. Moreover, the transportation cost to send sugar to Rajasthan, Gujarat and Madhya Pradesh has gone up.

"The sugar from UP is available at lower rate for these states than us. Therefore, the overall demand has decreased. The sugar mills have taken loans to recover operational expenses," he said.

Medhe, who is also the honorary adviser at Chhatrapati Rajaram cooperative sugar factory, said "The factories have already suffered this year owing to low yield of sugar cane. If the prices of sugar go below the Rs 3,400 per quintal, then it would become difficult to repay the loan. The government should adopt measures to keep the prices stable."

City based sugar trader Atul Shaha said, "The decision to import raw sugar has slowed down the purchase from Kolhapur sugar factories. Traders have been waiting for further decline in rates. Therefore, sugar is not being purchased from our market."