Pune: Small and medium-sized sugarNSE 0.60 % traders are focusing on trading other commodities after production of the sweetener exceeded demand over the past several years and speculation was curbed due to uniform rates following a government move to fix minimum support prices last year.
Trading in pulses, jowar and other grains, whose prices have fluctuated significantly due to recent droughts, has become more lucrative than trading in sugar.
“Flat prices have made a large number of traders - who used to do business only in the domestic market – shift to trading of other commodities. Only those who do exports have survived,” said Praful Vithlani, chairman, All India Sugar Traders Association.
The government set a legally binding minimum support price for sugar in June 2018 to prevent a big slide in prices following excess production. It set a floor price of Rs 29/kg ex-mill, when prices were trading at about Rs 24/kg in May ..
“Our trading volumes (for sugar) declined so much in the last one year that we have shifted our focus to other commodities like wheat, jowar, pulses, tea, salt etc," said Vijay Gujarathi, a 70-year-old Pune-based trader whose family has been trading in the commodity since 1928. “We used to send lot of sugar to Gujarat, Madhya Pradesh and Rajasthan, which has almost come to a standstill now," he said.
Traders in Maharashtra have lost their traditional markets in north India as well as t ..
Before the MSP came into force, sugar from UP used to be more expensive than Maharashtra by as much as Rs 2/kg. Due to uniform prices, mills in India’s largest state now have the advantage of lower transport costs to markets in and around North India.
"The ‘stock in trade’, which is the stock held by traders, used to be about 20 lakh tonnes before introduction of sugar MSP. Traders prefer ‘hand-to-mouth’ type of buying over stocking as abundant sugar is available at fixed rate,” Vithlan ..
0 Comments