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Marketing: sugarcane

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  • Marketing of sugarcane/sugar is highly controlled and subject to government restrictions. No producer/importer/exporter of sugar can sell/dispose of/deliver any kind of sugar except under and in accordance with the direction issued by the Government.
  • The profitability of sugar mills is affected by the ratio of free sale quota to levy quota. Though this ratio has been considerably reduced to 10:90, the sale of free sugar is subject to monthly release system.
  • Sugarcane alone accounts for 60 per cent of the cost of sugar production. Though the Central Government fixes the Statutory Minimum Price (SMP) for sugarcane, the mills have to procure sugarcane at State Advice Prices (SAPs) fixed by the State governments. As the SAPs are invariably higher than the SMP, it affects the viability of processing.
  • There is a visible difference in the plant size and operational efficiency of the mills in the private and the co-operative sector.
  • To achieve operational efficiency, availability of sugarcane is required throughout the season and requires proper management of raw material. It is however, difficult to ensure owing to farmers harvesting more than the quantity ordered to clear their fields or diverting cane to gur/khandsari units.
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