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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.

Govt lost moral authority: Gehlot on Trump's Indo-Pak mediation claims

PTI
May 13, 2025
2 min read


New Delhi: The Congress on Tuesday claimed the government has lost moral authority in the wake of US President Donald Trump announcing a "ceasefire" between India and Pakistan in the midst of hostilities and asked Prime Minister Narendra Modi to clarify the issue.


At a press conference at the party headquarters here, former Rajasthan chief minister Ashok Gehlot said people across the country feel that the Indian armed forces were going strong and could have given a befitting lesson to Pakistan to ensure it did not harbour terrorists or their camps in future.


He claimed the BJP has been rattled by the public sentiment over the sudden halt in military action and hence announced country-wide 'Tiranga Yatras' to placate the public. But people have now realised their "true colours", the veteran Congress leader said.


Gehlot also described Prime Minister Narendra Modi's address to the nation on Monday evening as "disappointing" and said he failed to clarify Trump's mediation claims. He also asked whether the government was under "any pressure" from the United States.


The Congress leader posed several questions to the prime minister on why he was not responding to claims of the US president.


Looking to corner Modi further, Gehlot sought his clarification on whether India has accepted a third-party mediation on Kashmir and claimed that the US has internationalised the issue.


Gehlot also reiterated the Congress' demand for a special session of Parliament to discuss the issue and a PM-chaired all-party meeting.


"The manner in which the ceasefire was announced, this government has lost the moral authority and moral courage to rule," Gehlot told reporters, adding that people feel this was an opportunity for the government to teach Pakistan a lesson.


"This was a golden opportunity for himself, the government and the country but it has been lost by the sudden announcement of a ceasefire," he added.


Gehlot said the opposition has been demanding a Parliament session where the government can spell out its thoughts and policy in the aftermath of the Pahalgam attack. "What pressure is the government under that the US intervened and claimed mediation," he posed.


The senior leader said the Army was performing well and could have taught Pakistan a lesson in never dreaming of indulging in terrorism again.


Further action by the armed forces would have deterred Pakistan from allowing terror camps in its territory, Gehlot said.


He said Prime Minister Modi addressed the nation on Monday, "but he disappointed". The country is not unable to grasp the "sudden ceasefire" because it was completely confidential, he asked.


Noting that the armed forces did a great job by targeting terrorist hideouts and its action was praised around the world and the country salutes them.


Gehlot also recalled the 1971 war, saying America had exerted pressure on India at that time too.


"But we never bowed down and divided Pakistan into two. Even during the Shimla Agreement, we did not let any other country come between us.


"But now, the way Donald Trump is intervening, Prime Minister Modi and the government should respond to it. Why is the government not giving clarification on Trump's statements? What contract has Donald Trump taken?" he posed.

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