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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.

Delhi’s Winter of Discontent

Dec 3, 2025
4 min read

The capital’s annual smog crisis is no longer a seasonal aberration but a policy failure in slow motion.

In recent years, winter in north India has become a season of dread instead of relief from the monsoons. Nowhere is this more viscerally felt than in Delhi, which has slipped from a polluted megacity into the ranks of the world’s most toxic capitals.


Until the early 1990s, Delhi’s air, though imperfect, remained largely breathable. A smaller population, fewer vehicles and favourable wind patterns helped disperse emissions. That equilibrium collapsed with astonishing speed. The city’s vehicle stock surged from roughly 1.5 million in the late 1980s to nearly 7.5 million today, while public transport and regulatory capacity failed to keep up. Fuels sold until 1999 contained sulphur levels of nearly 10,000 parts per million – a staggering one hundred times today’s permissible limit. At the same time, relentless construction, shrinking green spaces and dust-laced urban expansion quietly dismantled the city’s natural air filters.


Pollution Trap

The result is a winter ritual of suffocation. Delhi’s annual average PM2.5 concentration now hovers near 93 micrograms per cubic metre - six times the World Health Organisation’s safe limit. In November 2024, the Air Quality Index (AQI) climbed to a near-apocalyptic 491. A year later, on November 27th, 2025, it touched 396 - an exposure equivalent to smoking nine cigarettes a day. From October to February, meteorology conspires against the city. Cold air settles beneath warmer layers, forming a lid that traps pollution close to the ground. Winds weaken, rainfall disappears, and north-westerlies ferry smoke from neighbouring farm belts. Nestled within the bowl of the Indo-Gangetic Plain and hemmed in by the Himalayas and Aravalli range, Delhi struggles to ventilate itself even when emissions fall.


Every autumn, farms in Punjab, Haryana and western Uttar Pradesh set fire to crop residue to prepare fields rapidly for the next sowing. Stubble burning once accounted for as much as 38 percent of Delhi’s winter PM2.5 load. Subsidies for machinery, penalties and satellite monitoring have halved those emissions. Yet even a reduced share remains a powerful seasonal accelerant.


More stubborn is vehicular pollution, which contributes 40–50 percent of Delhi’s fine particulates year-round. Stricter Bharat Stage VI standards slashed per-vehicle emissions, but explosive fleet growth has wiped out the gains. Diesel cars still dominate. Public transport carries less than a tenth of daily commuters. Past fixes have either delivered fleeting relief or fizzled under weak enforcement. The uncomfortable truth is that cleaner engines cannot compensate for unchecked car dependence.


Delhi’s construction boom adds another layer of grit. Dust from building sites and demolition accounts for up to 40 percent of PM10 and roughly a fifth of PM2.5 in winter. Cleaner construction rules introduced in 2021 promised to cut dust by 70 percent. In practice, small builders evade scrutiny, monitoring is threadbare and winter construction surges precisely when dispersion collapses.


Though Delhi shut its three coal-fired power stations by 2018, it remains ringed by 11–12 plants within a 300-kilometre radius. Together, they emit sixteen times more sulphur dioxide than crop-burning fires. Heavy industry has mostly moved out, but brick kilns, illegal units and small factories persist, thriving on regulatory blind spots.


Waste is another silent culprit. Delhi generates 14,000 tonnes of garbage daily; over 3,000 tonnes still rot in landfills, releasing methane and noxious gases. Waste-to-energy plants, meant to incinerate the problem, emit toxic metals and dioxins, while hazardous ash often piles up near residential colonies. A proposed new facility in Bawana has already sparked local revolt.


Festive firecrackers complete the winter’s toxic cocktail. After Diwali, PM2.5 concentrations recently averaged nearly 800 micrograms, peaking at over 1,700 - almost 30 times safe levels. Blanket bans between 2020 and 2024 collapsed under illegal sales. Restaurants and street vendors, many still using coal- and wood-fired tandoors, add to the burden. Though cleaner fuels have cut some emissions, biomass burning in peri-urban homes alone still contributes nearly a quarter of winter particulates. Broken roads, dust storms and methane from long-saturated landfills ensure that everyday pollution never truly pauses.


Devastating Toll

The health toll is devastating. Delhi’s air now injures lungs with the efficiency of tobacco smoke. Asthma, chronic obstructive pulmonary disease and heart ailments surge each winter. In October 2025, three out of four households reported illness; nearly half sought medical care. The brain suffers too. Fine particulates are increasingly linked to dementia, anxiety, depression and psychosis. Hospitals have recorded sharp rises in neurological and psychiatric admissions, underlining how pollution erodes both body and mind.


The economic cost is just as grim. In 2019 alone, Delhi lost $5.6 billion - about 6 percent of its GDP - to pollution-related damage. Nationwide losses approach $37 billion annually. During severe smog episodes, hospital admissions jump by up to 100 percent. Workplace productivity drops by nearly a third. Tourism falls by half. Construction slows, commerce falters and outdoor labour retreats indoors.


Delhi’s chief defensive weapon, the Graded Response Action Plan (GRAP), introduced in 2016, triggers restrictions based on pollution levels. It does save lives and trims AQI by modest margins. But it is a mere seasonal fire extinguisher. Other initiatives like the Metro’s expansion, cleaner fuel standards and mechanised dust sweeping have produced measurable but fragile gains, repeatedly overwhelmed by urban growth.


High-profile gestures have fared no better. Smog towers purify tiny islands of air at immense cost. Odd-even traffic rules reshuffle journeys without shrinking vehicle numbers. Cloud seeding experiments were quietly shelved. School closures merely shift exposure indoors. Firecracker bans repeatedly collapse against cultural resistance, compounded by inconsistent enforcement and political equivocation.


Delhi’s crisis persists because governance remains fragmented and pollution largely migratory: nearly two-thirds of toxic load drifts in from outside the city. Planning remains silenced by political timidity and citizens have normalised ‘pollution season’ as an unfortunate but inevitable ritual.


What is required is ruthless enforcement, removal of end-of-life vehicles, mandatory scrubbers on all regional coal plants. Over the long run, polycentric urban planning with green corridors, stubble-free farming and biomass-free heating is needed. None of this will work without political courage and citizen restraint.


Delhi was once a pioneer in clean transport. Today it stands as a cautionary tale of unchecked urbanisation and uneven enforcement. India’s ambition of becoming a “Viksit Bharat” will remain hollow if its capital cannot breathe.


(The author is a Chartered Accountant with a leading company in Mumbai. Views personal.)

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