The dip in sales comes at a time during a season when sugar production has been hit due to less cane. Maharashtra, which produces 34 per cent of the country’s sugar, has reported 6.33 lakh hectare of cane and sugar production is estimated to be 445 lakh tonnes as compared to the 742 lakh tonnes of sugar produced last season.
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Sanjeev Babar, managing director of the Maharashtra State Cooperative Sugar Factories Federation said, demonetisation has played a major role in the dip of sugar sales. “Retail customers constitute 25 per cent of the sugar consumption and that market has been hit the hardest. Many retail customers have curtailed their sugar purchases,” he said. Cyclic nature of the business has resulted in sugar sales being affected across the supply chain, which leads straight to the sugar mills. In want of liquidity in the markets, consumers, Babar said, have been cautious in their buying and also have cut down on the monthly stock they normally kept.
Another reason for the slow sale is the late start to the season. Babar said besides Maharashtra, states like Uttar Pradesh has also witnessed less sales. Sales might pick up as the season progresses, he said.
Meanwhile, Sugar Commissioner Dr Vipin Sharma has called a hearing of millers who have failed to pay 100 per cent of the fair and remunerative price to the millers (FRP). Mills have paid Rs 3,041.80 crores to growers which amounted to 82 per cent of the total amount to be paid.