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Sugar Agri-Biz & Commodities - Agricultural Policy Industry & Economy - Exports & Imports States - Maharashtra Maharashtra sugar mills slash export price Harish Damodaran
New Delhi April 6 Piling inventories and the Election Commission's (EC) withholding of the Centre's recently announced relief package for the sugar industry have forced Maharashtra millers to slash their export floor price from Rs 1,320 to Rs 1,275 per quintal free-on-rail (FOR). The decision was taken at a meeting of the Sugar Export Cell under the Maharashtra Sugar Commissioner, Mr Rajagopal Devara, in Mumbai on Friday. "There was no option because at the Rs 1,320 price, we could only bag four contracts for 37,500 tonnes, against the targeted two lakh tonnes (lt)," said Mr Prakash Naiknavare, Managing Director of the Maharashtra State Co-operative Sugar Factories' Federation, who, along with his counterpart at the Maharashtra State Co-operative Bank, Mr D.M. Mohol, are also members of the Export Cell. During the current 2006-07 season (October-September), mills in Maharashtra have contracted exports of around 5.93 lt, of which 3.16 lt have already been despatched. "Our concern is the monsoon that usually hits Mumbai by June 7. As a result, the Jawarharlal Nehru Port Trust (JNPT) authorities are not accepting bulk-break bookings beyond May 25. Containerised exports, on the other hand, are not feasible. So, we are really racing against time," Mr Naiknavare said. Besides the monsoon factor, the other reason for slashing the export price was the EC restraining the Centre from notifying its recent industry bailout plan till the last phase of elections to the Uttar Pradesh Assembly on May 8. "We cannot wait that long, as mills are forking out an interest cost of Rs 15 per quintal for stocks held every extra month," he added. The Centre's package included creation of a 20-lt buffer stock on Government account and export sops ranging from Rs 1,300 to 1,400 per quintal.
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Maharashtra factories have this season, as on April 4, crushed 662.77 lt of cane and produced 76.16 lt of sugar. This compares to crushing of 433.36 lt and sugar output of 50.73 lt over the corresponding period of 2005-06. The 2006-07 season is expected to end with crushing of 735 lt and sugar production of 81 lt (against 445.78 lt and 51.97 lt in 2005-06). To deal with the glut, the Sugar Commissioner had, on February 27, directed mills not to sell sugar in the market at below the levy price at which they supply to the public distribution system. These were pegged at an ex-factory level of Rs 1,345 per quintal in South Maharashtra (Kolhapur, Sangli, Satara), Rs 1,337 in Central Maharashtra (Ahmednagar, Pune, Solapur, Nasik) and Rs 1,318 in north zone (Khandesh, Vidarbha, Marathwada). Subsequently, on March 18, the Export Cell also fixed a minimum ex-mill price of Rs 1,300 per quintal on exports. This was, on March 27, revised to Rs 1,320 on an FOR basis (delivery at the nearest railhead to JNPT, after adjusting for transport cost of Rs 40-80). In the latest Friday meeting, it was decided not only to reduce the export price to Rs 1,275 per quintal, but also allow mills in South Maharashtra to sell domestically at Rs 1,320 per quintal, against the earlier levy-level floor of Rs 1,345. The floor price has been left unchanged for the other two zones. "Our next meeting is on April 14," Mr Naiknavare informed.
Related Stories: More Stories on : Sugar | Agricultural Policy | Exports & Imports | Maharashtra
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