The sugar industry has been distressed after the food ministry on Friday announced an additional sugar quota of 2.50 LMT for domestic sale in September 2021. Earlier, the ministry had announced a sugar quota of 22 LMT for domestic sale in the month of September 2021.
Despite the ongoing festive season, marketmen find it tough to sell quota in 4 working days after the additional quota announced yesterday.
According to market sources, in Maharashtra state some millers have sold their sugar below ₹3300/Quintal which was trading earlier at 3380/Quintal to 3400/Quintal
In conversation with ChiniMandi News, a Maharashtra based trader Mr.Rajkumar Desai, owner at D Swayam Sugar House prominently known for railway rake movements commented on this situation. He said, “The sudden announcement of an additional quota of 2.5 LMT for the month of September 2021 has created a fear of pressurised sugar prices or even a collapse of prices in the minds of traders. Furthermore, such situations will always keep traders away from engaging in bigger trades where they may end up in bigger losses.”
Sharing views, Mr.Balasaheb Jadhav Managing Director – Shree Mahuva Pradesh Sahakari Khand Udyog Mandali Ltd, Gujarat, shared,“Already the quota of 22 lakh quota has not been completely sold around 40% sale is balanced and prices have dropped from ₹3650/quintal to 3550/quintal in Gujarat, an additional 2.5 lakh tons quota will collapse the price almost up to ₹3500/quintal leaving factories losing around ₹150 per quintal in September 2021. All the factories have cleared their cane arrears before 15th October 2021 and are awaiting export subsidies for 2019-2 & 2020-21 from the central government. It is impossible to sell 2.50 LMT in such a short time. We will write to the Department of Food & Public Distribution to extend this quota for a minimum 15 days in the upcoming month.”
Reality of current sugar market situation of Gujarat.