“No demand” haunts domestic sugar market

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As India combats the second wave of Covid-19 pandemic with different lockdown norms in every state. Though the F&B sector learnt on navigating through the uncertainties thrown up by the pandemic last year in various ways like widening the ecommerce platforms for distribution and realigning the product portfolio, players in the entire value chain are still feeling the heat.

The sugar industry that plays a major role in the FMCG sector; amidst the ongoing summer and major Islamic festival Ramadan, has been haunted by “no demand”. The closure of hotels, restaurants, caterers etc. has eliminated the consumption of sweets, mithais, beverages. The cut down of the number of persons attending any function has also added to the plight. As a result leading to financial stress and mounting cane arrears to sugar millers nationwide at a time when the country is expected to produce sugar approximately 10.2% higher than the previous year where the production was at 27.4 million tonnes.

In conversation with ChiniMandi News, Mr. Indraneel Chitale a fourth-generation entrepreneur from Chitale Group, a popular name for sweets, namkeen,instant mixes, pulps, juices, that stands as a widely recognized brand for more than 75 years shared his views on the ongoing situation. He shared, “Indeed there has been a drop in consumption of mithaais / sweets in the second wave. The second wave has affected the middle class so the drop is quite significant. Also the restrictions on store timings for all players to only four hours a day which limits the window to distribute products. This has led to a big drop in sales throughout channels right from standalone entrepreneurs,kiranas(small grocery stores), to branded stores and supermarkets. The sale numbers all down by approximately 40%.

A leading FMCG manufacturer (who does not wish to disclose his identity) shared, “The dsecond wave has led to a dip in deman just at a time when the sector had started a marginal recovery from the mounting losses of last year. Sweets, cakes and sweetmeat have taken a sharp dive in demand.”

Commenting on the situation sugar millers are facing, Mr.P.G.Medhe, Honorary Expert Advisor of Chhatrapati Rajaram S.S.K. Ltd, in Maharashtra state shared, “There has been no demand since a couple of weeks, stocks are piled at mills with sold sugar unlifted, logistics being an issue. Millers from Maharashtra requested the Government for a transport subsidy to regain its traditional market in North and East India which are currently captured by millers in Uttar Pradesh. However, there has been no decision on it.”

Further, Mr.M Manickam, Chairman, Sakthi Sugars shared, “There has been a slow-down in demand for sugar with hotels, restaurants and malls remaining closed. It has been “difficult and challenging in every possible way” for such businesses. Probably everyone expected this year to be better than the previous one, however this wave has strangled the market in terms of consumption, and demand may remain under pressure.”

Domestic sugar prices have been depressed nationwide. State wise sugar prices reported on May, 14, 2021 are:
– Maharashtra: S/30 Sugar rates from millers are ₹3110 to ₹3140/Qntl. whereas M/30 ₹3210.
– Karnataka : S/30 Sugar rates from millers are ₹3200 to 3250 whereas M/30 is at ₹3300.
– Uttar Pradesh: The rates for M/30 are ₹3225 to 3240
– Gujarat: The rates for new S/30 at ₹3101 to 3111 whereas new M/30 ₹3160 to 3180
– Tamil Nadu: S/30 Sugar rates are ₹3250 to 3325 whereas M/30 rates are at ₹3325 to 3375.
(All the above rates are excluding GST)

1 COMMENT

  1. Sir
    Why cannot the industry make pressure on Government to increase the Export Quota to 80 lakh tonne. Now the international market price is reasonably good. The burden of carry over cost of stock on Industry will come down.
    Rama Mohana Rao Madeti

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