Traders expect sugar prices to fall further

Over the last month,sugar has come down marginally. This is because since February,the government has issued strict instructions to all sugar mills to sell and deliver sugar to the market every week. At least 25 per cent of the stock has to be sold and delivered to the market,otherwise it becomes “levy’ sugar and goes to the Public Distribution System and is sold to the government at one third the market price.

“Earlier mills would stock the sugar,wait for prices to soar and then sell the stock in the last week at high prices. Now,they have to sell sugar in a phased manner otherwise they run the risk of it selling it at a loss,” Maharashtra Pradesh Congress Committee Kaniyalal Gidwani.

Gidwani said that it was illegal for the sugar federation to issue an instruction.

“Sugar is sold on the basis of supply and demand. Nobody can fix a price for sugar,” he said. Regulating the supply of sugar could have brought it down to less than Rs 30 in retail,he said. Gidwani has other suggestions ¿ the government ought to give importers a three year import permit which will be an incentive for them to plan in advance,government should also ask big coke companies and chocolate manufacturers to import sugar on their own. This will keep sugar prices down in the long run,he said.

As of now,traders are playing a wait and watch game with sugar mill owners. “It is only the second day of the week. Let us see how the remaining days of the week play out. How long will the mills hold on to the sugar? Unless the mills sell within this week,they will have to sell to the government at a loss,” Gujrati said.

Prakash Prakash Naiknavare,managing director of the Maharashtra State Cooperative Sugar Factories Federation said it was for the sugar mills to worry about when they wanted to sell the sugar.

“Why are the traders worried? It is for the sugar mills to worry about the levy deadline,” Naiknaware said.

“We are unable to sell below Rs 32 as we have already given farmers a very high price for the cane,” he said.

He said,the federation had only issued an appeal – not an order – which the managing director has the right to do under the federation’s bylaws.