Maharashtra sugar mills seek subsidy to compete with mills in UP

Sugar millers from Maharashtra are asking for subsidy of Rs 150 per quintal on domestic sale of sugar so that they are able to compete with mills from Uttar Pradesh. The decision was taken at a meeting of sugar millers and stakeholders called by Maharashtra deputy chief minister Ajit Pawar to discuss issues related to the sugar sector. 

Millers are seeking subsidy claims against railway receipts on dispatches of sugar on the grounds that they are losing market share to Uttar Pradesh.

Prakash Naiknavare, MD, National Federation of Cooperative Sugar Factories, said mills from Maharashtra have lost their traditional market share in the north and northeast to mills from Uttar Pradesh after the state overtook Maharashtra in sugar production. “Mills from Uttar Pradesh produce ‘M’ grade of sugar which commands a premium of Rs 1.5 per kg, and since there is no grade-wise minimum support price (MSP), the ‘M’ grade is sold at the same price as ‘S’ Grade,” he explained.

The Maharashtra Cabinet is also considering a proposal to offer Rs 1,500 a tonne internal transport subsidy to sugar mills in the state for sales in the domestic market, as part of efforts to help the industry tide over the current financial crisis.

The Uddhav Thackeray-led government will also consider proposing a dual minimum sale price (MSP), wherein the floor price will be different between mills in the northern parts of the country and the central region.

The other proposal Maharashtra Cabinet is considering is to permit the mills to pay the dues to sugarcane growers in three instalments as proposed by the Niti Aayog. Such a practice is being implemented in Gujarat.

All India Sugar Traders Association (AISTA) said that the sugar industry in Maharashtra is facing stiff competition from the mills in Uttar Pradesh. Earlier, mills in Maharashtra — which accounted for 35 per cent of the total sugar production in the country until 2009-10 — enjoyed a higher market share. 

AISTA has demanded that Maharashtra mills should be given freight incentive to regain the lost market share. Currently, Maharashtra mills are unable to sell sugar above Rs 3,100 a quintal, while Uttar Pradesh units are quoting Rs 3,200-3,250 a quintal.

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