Maharashtra mills dump sugar in northern markets

Sugar mills in Maharashtra, the country’s biggest sugar producing state, are intruding into markets catered to by mills in Uttar Pradesh, the second-biggest producing state. Sugar from Maharashtra is coming all the way to Delhi, Punjab and Bihar through rail and road.

According to industry officials, about 100,000 tonnes of sugar has come to Delhi and Punjab over the past two months. While some quantities of sugar always came from Maharashtra to North India, the quantities were never so large.

“For most of May and June, the Maharashtra sugar millers were realizing Rs 2,350-2,400 on every quintal of sugar. Therefore, they were selling large quantities to North Indian markets. The landed cost of Maharashtra sugar is Rs 2,600-2,650. By comparison, the UP millers were selling at a price of Rs 2,800 a quintal. The gap was attractive enough for traders to go for Maharashtra sugar,” said an official.

While Maharashtra millers were not making significant additional gains by selling in North India, offloading of stock helped them in reducing the pressure on prices in Maharashtra. The cost of sugar production is lower in Maharashtra compared to UP, due to lower sugarcane price and higher recovery from sugarcane. While the cost of producing a quintal of sugar in UP is Rs 2,900 a quintal, the same for Maharashtra is around Rs 2,700.