28 April, 2020
5 Min Read
Lockdown impact: Domestic sugar consumption
Part of: GS-III- Economy-Sugar policy (PT-MAINS-PERSONALITY TEST)
According to rating agency Icra, the national lockdown due to COVID-19 pandemic has adversely impacted the sugar demand, resulting in a decline in the sugar prices to closer to minimum support price (MSP) levels of Rs 31 per kg from Rs 32.5 per kg in February 2020.
The demand for sugar has witnessed a significant decline following the nationwide lockdown and the overall adverse impact on sugar consumption would be at least one million tonne in the domestic market.
The report further said that the sugar mills are unable to fulfill their monthly sales quota allocated by the government owing to demand squeeze.
The various reasons -
These factors have consequently led to a pressure on the working capital requirements of sugar mills and thus a rise in cane dues to farmers. However, the mills exporting sugar are likely to gain on rupee depreciation to an extent. The domestic sugar mills have already contracted close to 3.5-4 million tonne for export, it said, adding that the exports are likely to resume from June-July 2020.
In Maharashtra, he said the crushing operations have been impacted due to issues on harvesting and transportation owing to labour shortage with most of the migrant workers returning to their respective states.
The Union Cabinet has cleared a proposal to create an emergency sugar reserve of 4 million tonne and approved the Fair and Remunerative Prices for sugarcane for the year 2019-20.
Price Determination of Sugarcane
Commission for Agricultural Costs and Prices (CACP)
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