Sugar industry strains as traders reap profits

Gap between ex-mill prices, retail rates raised questions Kolhapur: The Indian sugar industry is caught in a deepening crisis, with sugar mills struggling to secure remunerative prices for their produce even as traders and middlemen appear to be making substantial profits. While sugar mills are receiving between Rs 4,600 and Rs 4,800 per quintal through recent sale tenders, retail prices have remained as high as Rs 58 per kg. The widening gap between ex-mill prices and retail rates has...

min read

Sugar industry strains as traders reap profits

Gap between ex-mill prices, retail rates raised questions Kolhapur: The Indian sugar industry is caught in a deepening crisis, with sugar mills struggling to secure remunerative prices for their produce even as traders and middlemen appear to be making substantial profits. While sugar mills are receiving between Rs 4,600 and Rs 4,800 per quintal through recent sale tenders, retail prices have remained as high as Rs 58 per kg. The widening gap between ex-mill prices and retail rates has raised serious questions about the role of intermediaries and the effectiveness of the Centre’s efforts to contain sugar prices. The margins available to traders and intermediaries have reportedly crossed 20 per cent, leaving sugar millers perplexed. At a time when both sugarcane growers and mill operators are under financial pressure, the trading chain appears to be benefiting disproportionately. The Centre must examine this growing disparity and take corrective measures to prevent speculative profiteering. Retail sugar prices began rising sharply in August, touching nearly Rs 70 per kg in some markets. The escalation added to inflationary pressures and caused concern among consumers, particularly ahead of the festive season. In response, the Centre introduced a series of measures to improve domestic availability and moderate prices. These included permitting duty-free sugar imports, initially until October 31, a deadline subsequently extended to December 31. The government also directed sugar mills to commence the crushing season from October 15 and tightened monitoring of sugar stocks. In another significant intervention, it modified the ethanol policy, restricting the diversion of sugarcane juice, sugar syrup and B-heavy molasses for ethanol production. Following these measures, sugar mills began witnessing a decline in the prices offered through their sale tenders. Recent transactions have fetched between Rs 4,600 and Rs 4,800 per quintal. Going by the conventional relationship between ex-mill prices and retail rates, sugar should ideally have been available to consumers at less than ₹50 per kg. However, retail prices continue to hover around Rs 58 per kg, pointing to a substantial disconnect between the mill gate and the consumer market. Traditionally, sugar retailing operated on relatively thin margins. Since sugar is an essential commodity, retailers often treated it as a low-margin product to attract customers who would subsequently purchase other household provisions. The margin was sometimes informally equated with the resale value of the empty 50-kg jute bags in which sugar was supplied. This was considered a nominal return for retailers. That traditional pricing mechanism, however, appears to have undergone a significant change. The widening gap between mill-level tender prices and retail rates has created considerable scope for intermediaries to extract higher margins. The critical question is whether the additional amount paid by consumers is reaching the sugar mills or remaining within the trading chain. The issue assumes particular significance in Maharashtra, where the sugarcane pricing dispute has intensified ahead of the new crushing season. Farmers’ organisations have been demanding a minimum price of Rs 5,500 per tonne for sugarcane. Millers, meanwhile, are preparing to agitate for a revision in the Fair and Remunerative Price (FRP) framework and the restoration of a more supportive ethanol policy. The Swabhimani Shetkari Sanghatana, led by Raju Shetti, has taken a firm position that sugar mills should not be allowed to commence operations until farmers receive an acceptable price for their cane. Shetti has also drawn the state government’s attention to the unusually high retail prices of sugar, questioning why consumers continue to pay more even as mills are forced to sell at relatively lower rates. The Centre’s sudden changes to the ethanol policy have further complicated the industry’s financial position. Ethanol production had emerged as an important revenue stream for sugar mills, enabling them to diversify operations, improve cash flows and enhance their capacity to pay farmers. Restrictions on the diversion of sugarcane-based raw materials have weakened this support at a critical juncture. The resulting contradiction is difficult to ignore: farmers are demanding better cane prices, millers are struggling with shrinking realisations and policy uncertainty, while intermediaries appear to be benefiting from the gap between wholesale and retail prices. The government cannot address the sugar crisis merely by regulating mill stocks, imports and ethanol diversion. It must also examine the entire supply chain, identify where the widening margins are accruing and ensure that the benefits of market interventions reach both sugarcane growers and consumers. With nearly Rs 2 lakh crore riding on the sugar economy, allowing intermediaries to thrive while the industry’s primary stakeholders struggle would be a serious policy failure.

Administrative Sabotage

Correspondent

Dec 28, 2025

3 min read

West Bengal’s voter-roll clean-up has exposed a government that treats electoral integrity not as a civic duty but as a political inconvenience.

A democracy’s health can often be measured not by how loudly its leaders invoke the ballot, but by how scrupulously they guard the machinery behind it. In West Bengal, that machinery is now grinding audibly. The Election Commission of India’s Special Intensive Revision (SIR) of electoral rolls has become a stress test of the Mamata Banerjee government’s commitment to clean elections. The results so far are damning.

Consider the numbers. Of the 4,600 micro-observers appointed by the ECI to supervise hearings on claims and objections, 778 failed to even attend a mandatory training session in Kolkata on December 24. These were not party cadres or political appointees, but Group A and Group B central government employees, drawn deliberately from outside the state’s political ecosystem, though posted within it, to act as neutral sentinels. Their collective absence was so brazen that the Commission was forced to issue show-cause notices, threatening disciplinary action and even suspension. For an exercise as procedurally modest as voter verification, such defiance is extraordinary. However, this seems to be familiar in Mamata Banerjee’s West Bengal.

The hearings will determine the fate of some 32 lakh ‘unmapped’ voters, citizens whose names, or whose parents’ names, did not appear in the 2002 SIR list as well as thousands more flagged for logical inconsistencies. The process is pure housekeeping.

Discrepancies in spelling, age or parentage are expected to be resolved while voters who miss a hearing are to get another chance. All documents are uploaded digitally. If anything, the process bends over backwards to err on the side of inclusion.

Yet it is precisely this insistence on procedure that seems to have unsettled the Trinamool Congress (TMC) government. From the outset, the party has alleged that micro-observers were being ‘imported’ from other states, a claim swiftly rebutted by the Chief Electoral Officer.

More telling is the quiet resistance on the ground. Micro-observers are meant to sit at 11 tables in each of the state’s 294 Assembly constituencies, alongside Booth Level Officers, supervisors and Electoral Registration Officers, examining enumeration forms and correcting errors. Their unexplained absence threatens to slow or derail the process.

The exclusion of Booth Level Agents (BLAs) - party representatives - from the hearings has further sharpened the confrontation. The ECI insists this is to “avoid unnecessary chaos” and ensure transparency, since all documents are uploaded and nothing can be hidden. That logic is sound. BLAs, unlike BLOs, are partisan actors who were already involved in collecting documents. But for the ruling TMC, accustomed to embedding itself at every stage of the electoral pipeline, even a modest reduction in visibility can feel like disenfranchisement.

Mamata Banerjee has long styled herself as a ‘defender’ of democracy against an ‘overbearing’ Centre. The reality offers a sobering contrast. West Bengal’s recent electoral history, from the uncontested panchayat polls of 2018 to post-poll violence in 2021, has left scars that no amount of populist flourish can disguise. The SIR exercise was an opportunity to restore some confidence: to show that the state would cooperate fully with an independent constitutional authority, even when it was inconvenient. Instead, it has chosen obstruction.

The same government that rails against alleged voter suppression elsewhere now appears uncomfortable with the idea of voters being properly mapped, verified and documented at home. The same party that claims to speak for the marginalised balks at a process designed to ensure that genuine electors are accurately recorded. Transparency, it seems, is welcome only when it is ornamental. When a state government allows or encourages a culture in which officials feel emboldened to skip training, ignore orders and test the Commission’s patience, it sends a corrosive message about the nature of democracy in West Bengal.

Banerjee and her government are being asked to tidy its rolls. Instead, they are untidying their reputation by such unseemly defiance.

Sugar industry strains as traders reap profits

Administrative Sabotage

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