Sugar to taste bitter as Maharashtra sees 35% drop in production

After pulses, it seems that sugar is turning bitter for the common man.

Maharashtra, which contributes a third of the country's sugar production, is expected to see a 35% drop in its output during crushing season for 2016-17 that begins in November.

Compared to 84 lakh tonnes last year, the production is expected to come down approximately to 50-55 lakh tonnes this year mainly due to drought, market experts told dna.

In India, the sugar production is projected to be around 22 million tonnes in 2016-17, which is much less than annual consumption figures of 26.5 million tonnes. This is likely to give jitters to the Central and state governments, given that public are yet to come to terms with the rise in pulse prices.

Due to speculations of skewed production, sugar prices have jumped by 25% compared to last year. From Rs 2,700 per quintal in November 2015, the sugar prices have touched to Rs 3,500 per quintal in July, say government officials.

Though it has remained stable since, projection of less production has forced the government to go in for fire-fighting before the things turn sour.

Maharashtra, on its part, has asked the Centre to impose a ban on future trading in sugar and allow import of raw sugar to keep prices in check. It has also requested to stipulate stock limit for sugar mills.

"Sugar commissioner report has projected less production this time. The department is concerned and keeping a close watch on hoarders and sugar mills to avoid a repeat of pulse. We have asked Centre to impose a ban on future trading of sugar, stipulate stock limit for sugar mills and allow import of raw sugar as precautionary measures," Mahesh Pathak, secretary, Food and Civil Supplies department told dna.

The Centre has agreed to the third demand and has imposed a stock limit for sugar mills by issuing a GR on September 8. For September, the limit is stipulated at 37% and for October it is 24%. "This is done to ensure steady flow of sugar to market," said officials. Stock limit for traders is 500 tonnes for whole-salers and 50 tonnes for retailers. Compared to 8 lakh tonnes sugar stock in July, the state has only 5 lakh tonnes now, say officials.

Vinay Kore, president of Warna Sugar Mills, said that the measures are inadequate and won't help much. "Importing the sugar is the only option to meet the consumer demand," he said alleging that the Centre is confused and hence taking contradicting steps to handle the situation.

"First they banned export, then imposed duty on export. Stock limit was brought for the traders and now for the mills, which too is illegal." He also demanded that sugar be dropped from the Essential Commodities Act. "The British included it to ensure sugar for their army during the Second World War. Why do we need it now?" he asked.