Sugar Mills in Maharashtra Unable to Benefit from Price Hike Due to Cash Flow Crisis

17-Feb-2025 10:41 AM

Sugar Mills in Maharashtra Unable to Benefit from Price Hike Due to Cash Flow Crisis
★ Although sugar prices have risen in the domestic market, sugar mills in Maharashtra are unable to fully benefit from the price hike, while mills in Uttar Pradesh are selling their sugar at premium rates.
★ Mills in Uttar Pradesh are selling sugar at Rs. 40,000 per ton, whereas Maharashtra mills are receiving only Rs. 38,000 per ton.
★ The weak financial condition of Maharashtra's sugar mills is the main reason for this price difference. Most mills need to borrow loans from banks or traders to cover transportation, harvesting, and other operational expenses.
★ Due to expected production reductions in both Uttar Pradesh and Maharashtra, sugar prices in the domestic market have risen. On Saturday, the National Federation of Cooperative Sugar estimated that total sugar production this year will be 27 million tons, which is 10-15% lower than initial projections.
★ This has raised concerns about meeting the 1 million ton sugar export quota.
★ If mills do not plan ahead, the cash flow crisis could worsen in the next season.