In a surprise move, the Indian Sugar Mills Association (ISMA), the apex body of private sugar millers in the country, has written to the central government, seeking reconsideration of the revised sales quota for the current month. The Association has said that increased sales quota might lead to a drop in ex-mill prices of sugar.
In the letter, ISMA president Aditya Jhunjhunwala has protested the 23.5-lakh tonne sales quota given for the month of September, pointing out that it is higher than the normal 22 lakh tonnes of sale that mills see on an average monthly basis.
Even for July 2022, the monthly sales quota had to be extended till August 31 due to lower monthly sales.
Currently, sugar mils are commanding ex-mill prices of Rs 3,400-3,500/quintal, but uncertainty over next season’s export quota looms large. The additional sales quota will have a detrimental effect on sugar prices, ISMA stated in the letter. The present sugar price is lower than last year’s and due to no clarity over exports, mills have been been forced to sell sugar at a lower price. Mill owners have now sought a rollback of the excess sales quota.
The sugar season of 2021-22 for India had been exceptionally good with high production and record prices. The country had seen robust export of nearly 100 lakh tonnes of sugar without any government incentive before the Centre put the brakes on exports.
With the 2022-23 sugar season expected to start in October, the industry is hopeful of another good season.
But the letter reveals that the fear of unsold inventory weighs heavy on the mind of mill owners.
