State steps in to stem sugar price slide

PUNE: The sugar commissioner’s February 27 order asking sugar mills not to sell at below-levy rates has helped arrest the slide in ex-factory sugar prices in the state.

According to a statement released by the Maharashtra Rajya Sahakari Sakhar Sangh, the apex body in the state, such a step had to be taken to ensure that mills paid farmers at least the statutory minimum support price (SMP).

The sugar commissioner had to issue such an order in view of the falling prices of sugar — ex-factory rates had slid close to Rs 1,200 per quintal. Sugar mills take loans from banks for crushing at the then prevailing rates.

Since sugar prices had fallen, in view of a record production this year (October-September), cooperative mills in the state would have faced a repeat of short margins, with bags pledged to the banks selling at lower than the loan amount.

The sugar commissioner’s order was also applicable to banks — that they should not sell below the levy rate. The Central government had set the rate for levy sugar for the current crushing season 2006-2007 at Rs 1,344.81 per quintal for south Maharashtra, Rs 1,318.16 per quintal in northern Maharashtra and Rs 1,337.03 per quintal in central Maharashtra.