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Mills across Maharashtra are facing a severe liquidity crunch due to low sale, surplus stocks of sugar and are under pressure to clear pending cane arrears of sugarcane farmers.
Millers are also citing that they are unable to accomplish selling the monthly sale quota fixed by Central government, due to which they failed to make timely payment to cane growers. Usually, sugar millers sell the commodity to those traders who purchase it in bulk quantities. As part of the process, mills float tenders where traders participate in them. Once such deals are finalized, the wholesale traders then move ahead to deal with retail traders in small towns from where the sugar passes on to the hands of retail consumers. Of late, mills had complained of low sales as many of their tenders have remained unanswered.
To come out of this crisis, Maharashtra sugar commissioner Mr.Shekhar Gaikwad has suggested sugar mills to go for retailing of sugar.
In a conversation with ChiniMandi.com, Maharashtra Sugar Commissioner, Mr.Gaikwad, said, “The market is witnessing scanty demand, while millers are selling their sugar stocks to traders, I have also suggested them to go for retailing which would help them earn better prices. This step may bring ease amongst millers from the crisis they are facing.”
“If the retail sales happen in the vicinity of the mills, it will not only lead to higher realization but also ensure cheaper sugar for the customers,” he further added.
The step will also provide the mills with an opportunity to increase their sales by exploring this untapped market, instead of looking at export options. Retail sales will be within the stock limits, set by the central government.
Since sugar commissioner advised sugar mills to go for retailing, many mills have shown interest in it.
P.G.Medhe, Honorary Expert Advisor of Chhatrapati Rajaram S.S.K. Ltd, said, “Retailing of sugar stocks have been taking the good pace and has fallen in our favor. We have been able to channelize our stocks in the city because of the lesser cost of transport as the mill is located within the city limits. However, we yet have piled stocks which need to be channelized. Retailing of sugar is a successful module; however, it is a temporary painkiller to the crisis of surplus stocks which we are facing.”
In Maharashtra, the arrears are to the tune of Rs 5,000 crore.