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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.

Choked Capital

Correspondent
Dec 2, 2025
3 min read

Delhi’s winter smog is the symptom of a chronic governance failure.

Delhi
Delhi

Even with farm fires at a multi-year low, Delhi-NCR’s winter air remains suffocating. For most of October and November, pollution levels oscillated between “very poor” and “severe,” fuelled not by distant fields but by a rising cocktail of PM2.5, nitrogen dioxide and carbon monoxide from vehicles, industry, waste burning and domestic fuel. According to the Centre for Science and Environment, 22 monitoring stations recorded carbon monoxide above permissible limits on more than half of the 59 days assessed. Dwarka Sector 8 logged breaches on 55 days, followed closely by Jahangirpuri and Delhi University’s North Campus at 50. Smaller towns in the National Capital Region fared no better, with Faridabad, Ghaziabad, and Sonipat reported smog episodes of unprecedented duration.


The picture is no longer confined to isolated hotspots. Jahangirpuri, Bawana, Wazirpur, Anand Vihar and Mundka routinely breach PM2.5 averages of over 100 µg/m³ which is five times the World Health Organization’s guideline. New hotspots from Vivek Vihar to Patparganj underscore a worrying trend of the capital turning into a patchwork of pollution nodes. The message from the data is stark: stubble burning, while widely blamed, contributed less than 5 percent of Delhi’s pollution for much of early winter. Local sources, especially vehicular emissions, are driving the city’s chronic smog.


PM2.5 spikes track nitrogen dioxide during peak traffic hours, with carbon monoxide similarly breaching limits. The synchronised peaks of these pollutants are no accident. Shallow winter boundary layers trap emissions, turning the city into a gas chamber. Yet policy remains fixated on dust suppression, sprinklers and sporadic measures against farm fires while the engines of pollution hum unchecked. Delhi’s local emissions are effectively ignored even as residents cough through the morning commute.


Late last month, a small protest at India Gate against hazardous air quality met a heavy police presence. Deploying the Rapid Action Force to contain peaceful demonstrators sends a message that Delhi’s authorities are incapable of addressing the root causes of smog. Public frustration is rising, as middle-class recourse to purifiers and private vacations no longer suffices.


This is hardly Delhi’s first brush with national embarrassment. In November 2016, after PM2.5 crossed 900 µg/m³ in parts of the city, schools were shut, flights were diverted and the Supreme Court memorably described the Capital as a “gas chamber.” In 2019, the city plunged into another health emergency after post-Diwali pollution sent AQI readings beyond 500, forcing the odd-even scheme back onto the streets.


Air pollution in North India is not merely a Delhi problem. Monitoring stations trace a continuous zone of foul air stretching from Islamabad to Bihar, where industry, power generation, transport and agriculture circulate in a shared airshed. Yet authority is fragmented among central ministries, state departments, municipal bodies and semi-autonomous regulators, each with partial jurisdiction and mixed incentives. The Commission for Air Quality Management was meant to coordinate this tangle, but its interventions have failed to match the scale or persistence of the threat. Treating winter smog as a seasonal emergency rather than a permanent condition has encouraged episodic action without structural reform.


What is required is nothing short of an overhaul with time-bound electrification targets, scrapping of old vehicles, expansion of public transport, congestion taxes, industrial fuel reforms, elimination of waste burning and remediation of legacy dumps. Quick fixes consume public funds and administrative bandwidth without denting emissions. Only persistent, enforceable measures backed by political courage will clear the air.


Meanwhile, pollution refuses to wait. The AQI this week has already risen to 331, with Bawana at 387, Anand Vihar 381 and RK Puram 356. Residents report burning eyes, constant coughing and disrupted routines. With temperatures dropping further and winter settling in, the smog will thicken. Delhi’s air is now an emblem of systemic failure, of a capital choking not just on exhaust fumes, but on bureaucratic inertia and political timidity. It is the mirror of India’s fragmented, reactive approach to environmental governance.


Until policymakers confront the underlying emissions, and until enforcement is scaled to the severity of the crisis, Delhi will remain a city in visible distress and a capital perpetually choked.

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