Sugar News Details

Maharashtra mill starts retail sale of sugar


In order to increase their sales, sugar mills in the state may soon start retailing sugar. The first such retail outlet, by Shreenath Mhaskoba Sakhar Karkhana Limited, was inaugurated by Sugar Commissioner Shekhar Gaikwad in Sikrapur village of Pune district, on Wednesday.
Usually, sugar mills sell the commodity to traders, who purchase it in bulk quantities. As part of the process, mills float tenders and traders participate in the same. Once such deals are finalised, the wholesale traders then deal with retail traders in small towns, from where the sugar passes on to the hands of retail consumers. Of late, mills have complained of low sales as many of their tenders have remained unanswered. This has created a liquidity crunch for millers, with many of them failing to pay farmers even the basic Fair and Remunerative Price.
“If the retail sales happen in the vicinity of the mills, it will not only lead to higher realisation but also ensure cheaper sugar for the customers,” said Gaikwad. The step also provides the mills 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 of the mills, set by the central government.
D M Raskar, chief executive officer of the mill, said, “We pledge our sugar stock to the bank and have to pay interest to them. In case of retail sales, we will not have to do so as ready cash would be available to us”.
Till now, most sugar mills have avoided getting involved in retail, given the complex value chain involved. However, this move can open newer opportunities for the mills, said Gaikwad.
Cooperative mills usually sell sugar at concessional rates to shareholders, but only in limited quantities. “I will be observing the daily sales figures for a month. After that, the matter will be presented before the managing directors of the sugar mills for their consideration,” said Gaikwad.