Maharashtra’s sugar industry loses its sweetness as unsold stocks come to haunt

Unsold quotas and record sugar stocks are expected to weigh more on Maharashtra’s sugar sector than its counterpart in Uttar Pradesh. Millers in Maharashtra have recorded a gap of almost 40-50% in monthly sales quota which would see the state start next season with around 60 lakh tonnes of unsold stock.

In terms of stocks, factories in Uttar Pradesh are in a better position as most have either met their monthly quota or exceeded their quota by a small percentage.

Since the start of the 2020-21 sugar season, mills in Maharashtra have struggled to meet their monthly sales quota. Due to the lack of sales, factories have taken to selling sugar below the minimum selling price (MSP) of Rs 3,100/quintal, which has aggravated the problems in the sector.

Prakash Naiknavare, managing director of the National Federation of Cooperative Sugar Factories Limited, said sales issues have plagued Maharashtra for the past three seasons.

“The introduction of the Co 0238 cane variety has given a huge boost to the sugar industry in Uttar Pradesh, which has gone to conquer the traditional markets of Maharashtra in northeastern India,” said he declared.

Maharashtra’s industry had always produced more than its captive consumption, so factories had to sell to other states. Neighboring states like Karnataka and Gujarat have their own sugar industry, so North East India was a good option for millers in Maharashtra.

However, this advantage has long since disappeared as Uttar Pradesh enjoys the advantage of distance, which allows mills to sell their sugar at a lower cost than Maharashtra. Another development that has gone against the industry in Maharashtra is the decision by the sugar sector in Uttar Pradesh to sell its premium grade M sugar on par with grade S sugar, which is produced in Maharashtra. .

“M-grade sugar has larger grains, so normally this sugar has a higher price than S-grade sugar. However, that advantage has now disappeared,” Naiknavare said.

As a result, Maharashtra is expected to start its season with an unsold stock of 60 lakh tonnes of sugar. Nationally, the sugar industry is placed in a comfortable position with an opening stock of 90 lakh tonnes, Naiknavare added.

The country as a whole had recorded a production of around 300 lakh tonnes of sugar with record exports of around 65-70 lakh tonnes. For the next season, the industry is expected to produce 310 lakh tonnes of sweetener, with 30 lakh tonnes being diverted to ethanol production.

Rachel J. Bradford