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By:

Rajendra Joshi

3 December 2024 at 9:20:26 am

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...

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.

Ashes and Answers

Correspondent
Jun 16, 2025
3 min read

The Ahmedabad plane crash has prompted a state-led overhaul in victim support and aviation oversight.

Gujarat
Gujarat

In the aftermath of the Air India Flight AI 171 calamity that occurred in Ahmedabad, the Gujarat government has emerged not merely as a peripheral aid centre but as a central coordinator in managing the aftermath, thus transforming a state tragedy into a blueprint for rapid-response governance.


The crash, which claimed the lives of more than 270 individuals aboard and on the ground, has jolted not only aviation authorities and corporate headquarters, but also the state and local bureaucracy, which scrambled to mount a rapid and unusually coordinated response. In the weeks since, India has begun to draw lessons from the disaster about the fragility of high-tech aviation, the importance of local governance in moments of crisis and the need for systemic reform in both prevention and response.


Gujarat’s authorities established on-site death-certification desks, allowing families to receive paperwork and logistical support at hospitals without visiting multiple offices.


The integration extended to village patwaris issuing family relation cards on the spot, easing inheritance and estate issues. Thousands of DNA samples were collected in a coordinated effort with the Civil Hospital alone recording 47 matches.


That said, a number of relatives of the deceased have voiced frustration at delays. While the DNA matching, normally a 72-hour process, has been expedited, it nonetheless remains painstakingly methodical.


The Gujarat relief machinery has also fielded emotional aid. Officials have formed 230 teams, each led by deputy collectors or tehsildars, to support families through ambulance facilitation and grief counselling. Mental health relief has become a core element of their strategy, acknowledging trauma not only for mourners but also for survivors of the hostel buildings hit by the jet.


The disastrous incident has led, in many ways, for the Gujarat government to set the template for national structures currently taking shape to manage the aftermath of such events.


A fairly unprecedented parliamentary committee is being assembled to quiz Air India, Boeing, and the DGCA, aiming for enhanced aviation safety measures from take-off protocols to maintenance audits. Meanwhile, the Ministry of Civil Aviation has tasked a multidisciplinary panel to complete a probe within three months.


The pressing need of the hour are wide-ranging institutional reforms. On the operational front, the DGCA has mandated additional inspections on Air India’s entire 787 fleet. Eight aircraft have been checked so far, focusing on potential issues with engine thrust, flap mechanics, and take-off configurations.


Yet the more remarkable story unfolded in the hospitals and municipal offices. Drawing on hard-earned experience from past disasters, officials moved quickly to sidestep India’s notoriously sclerotic bureaucracy. The ‘single window system’ for death certificates and insurance claims has been extended to include help desks staffed by nodal officers from New India Insurance, LIC, and HDFC Life - all set up at the Civil Hospital. Thus, what might have been another bureaucratic logjam has become a prototype of responsive governance.


Meanwhile, the state’s ATS and NSG quickly retrieved the plane’s black boxes and the digital flight data recorder. Their recovery from the rooftop and tail section was a crucial step in aiding relay to the AAIB and contributing to the preliminary probe.


Gujarat’s governance choreography under pressure has attracted nods for its precision and empathy. Its disaster management template, which has been a fusion of hospital-based services, legal expedience, psychological relief and frontline coordination, may now inform national protocols and international best practice for aviation disasters.


Yet authorities face pressing practical challenges. Identification delays persist and families wait to perform rites together. There are questions that loom, like how deeply will safety reforms penetrate the tangled web of maintenance regimes, and will Gujarat’s crisis management playbook endure beyond this tragedy?


Still, the most lasting impact may not be in the air but on the ground. In a country too often paralysed by post-disaster administrative inertia, the handling of Flight AI 171’s aftermath offers a model of what a responsive, human-centric state can look like. The integration of technology, forensics, and local governance created a rare moment of dignity amid devastation. That it took a tragedy to reveal this capacity is a sobering fact.

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