The Maharashtra Cupboard will subsequent week take into account a proposal to supply ₹1,500 a tonne inner transport subsidy to sugar mills within the State for gross sales within the home market, as a part of efforts to assist the business tide over the present monetary disaster.
The Uddhav Thackeray-led authorities can even take into account proposing a twin minimal sale worth (MSP), whereby the ground worth can be completely different between mills within the northern elements of the nation and the central area.
The opposite proposal that the Cupboard will take into account is to allow the mills to pay the dues to sugarcane growers in three instalments as proposed by the Niti Aayog, the coverage think-tank of the Centre. Such a apply is being applied in Gujarat.
All India Sugar Merchants Affiliation (AISTA) Chairman Praful Vithalani stated that the Cupboard had determined to take up these points after he made a presentation on the state of Maharashtra sugar business.
In his presentation to the Cupboard, the AISTA Chairman stated that the sugar business in Maharashtra is going through stiff competitors from the mills in Uttar Pradesh. Earlier, mills in Maharashtra — which accounted for 35 per cent of the whole sugar manufacturing within the nation till 2009-10 — loved a better market share. However the State’s manufacturing has dropped by almost 5 proportion factors previously decade, leading to Uttar Pradesh mills dominating the market.
“Uttar Pradesh mills have earned a better market share resulting from inner freight benefit,” Vithalani advised the Maharashtra Cupboard.
One of many causes for that is that many of the larger sugar consumption States similar to Uttar Pradesh, Rajasthan, Madhya Pradesh, Punjab and Haryana are within the North.
This has resulted in Maharashtra being unable to promote even 70 per cent of the month-to-month gross sales quota allotted by the Centre. Through the first 4 months of the present season (October 2020-September 2021), mills in Maharashtra have bought 18.46 lakh tonnes (lt) in comparison with their gross sales quota of 26.27 lt.
As compared, Uttar Pradesh mills have bought 37.86 lt of sugar towards the gross sales quota of 35.36 lt, whereas Karnataka mills bought 11.63 lt towards the 11.12 lt quota.
“With decrease gross sales and decrease income, Maharashtra mills are struggling to make funds for the cane to growers on time,” Vithalani stated.
With the intention to pay growers on time, sugar mills within the western State are promoting their shares under the MSP of ₹31 a kg, fastened by the Union Authorities. Sugar mills in Maharashtra owe the growers over ₹2,500 crore for the cane they equipped this season. Dwelling on freight benefit, Vithalani stated that among the markets similar to Kolkata and Guwahati had been 1,000-1,500 km extra for Maharashtra mills to move sugar in contrast with Uttar Pradesh mills.
Consequently, Maharashtra mills which are more likely to produce a report 108.3 lt of sugar this season can be carrying over 60 lt of sugar to the following season. That they had carried over 36.7 lt of sugar from the final season.
Single-stroke FRP fee
The issue for Maharashtra mills is that farmers are demanding fee of FRP at one go, creating a further curiosity burden on the business.
The AISTA Chairman stated Maharashtra mills needs to be given freight incentive to regain the misplaced market share. Presently, Maharashtra mills are unable to promote sugar above ₹3,100 a quintal, whereas Uttar Pradesh models are quoting ₹3,200-3,250.
In view of the worth distinction, the Maharashtra authorities might ask the Centre to repair completely different MSPs for various areas, notably northern and central.