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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.

Imran Khan’s Fall from Grace

Writer: Kaswar Klasra
Kaswar Klasra
Aug 27, 2024
4 min read

Updated: Oct 21, 2024

Imran Khan’s Fall from Grace

Imran Khan, once hailed as Pakistan’s most charismatic and resilient leader now finds himself in a position unprecedented for a man of his stature.

The former Prime Minister of Pakistan, once known for his unyielding spirit and fierce determination, now shows signs of strain. Imprisoned and facing numerous charges, Khan appears to be a shadow of the leader who once inspired millions.

Khan’s recent meeting with journalists revealed a man who is a shell of his former self. Once confident and commanding, his body now shows a sense of unease and agitation. Those who met him describe a waning spirit, a stark change for a leader once known for his steadfastness in adversity.

The journalists described Khan as a man who is aware that his political party, Pakistan Tehreek-e-Insaf (PTI), is losing its once-iron grip on the nation’s imagination―a realisation that visibly shook him.

The PTI, once a magnet for massive crowds and inspired loyalty among its supporters, is now struggling. The much-hyped rally scheduled for August 22 in Islamabad, was embarrassingly cancelled due to a lack of public interest. Khan, in a bid to save face, claimed that the rally was called off to avoid potential violence. In a sign of growing desperation, Khan rescheduled the rally for September 8 and directed his party leaders to overcome any obstacles. This defiant stance is typical of Khan’s confrontational style, and his public directives highlight his insecurity about his party’s ability to mobilise support.

While Khan outwardly appears calm and composed, the multiple cases against him and his time in jail have left him isolated and struggling with loneliness. Even in this difficult situation, he remains in the headlines, thanks to his uncanny ability to stay in the public’s eye. Khan recently made headlines by applying for the University of Oxford Chancellorship, a move initially dismissed as a rumor but confirmed by his spokesman, Sayed Zulfikar Bukhari. As an Oxford alumnus, Khan would be the first Asian to take the role. Many see this bid as a strategic play to leverage his international profile against Pakistan’s establishment, a move that has kept him prominently in the media spotlight.

The political landscape in Pakistan is deeply divided. Prime Minister Shahbaz Sharif, in his second term, has failed to address critical issues including unemployment, soaring inflation, and deteriorating law and order. His administration’s inability to deliver on its promises has only deepened the public’s disillusionment, leading to growing nostalgia for Khan’s past leadership.

Shahbaz Sharif’s government is a source of frustration for the Pakistani people and a cause for concern for the country’s military. Historically, the military has shaped Pakistan’s political trajectory, stepping in when civilian governments falter. The military reportedly is growing uneasy about the government’s performance especially Sharif’s inability to stabilize the country and mend relationships with key neighbors, particularly India. Additionally, its deteriorating ties with Afghanistan and Iran have left Pakistan increasingly isolated. Even China, Pakistan’s longstanding ally, has expressed dissatisfaction with the government’s policies, a worrying sign given the importance of the China-Pakistan Economic Corridor (CPEC) to the country’s economic future.

It is within this context of political turmoil and international isolation that Imran Khan remains a potent force. Despite his legal troubles and the challenges facing his party, Khan’s popularity endures. For millions of Pakistanis, his tenure as Prime Minister is seen as a time of relative stability and hope, a stark contrast to the current administration’s ineptitude. This perception has kept Khan’s political base intact, even as his party faces an uphill battle in the coming months.

However, Khan’s ability to navigate the current political landscape is far from guaranteed. The PTI’s diminishing support, coupled with the increasing pressure from the establishment, raises questions about Khan’s long-term strategy. His recent moves, including the application for the Oxford Chancellorship, suggest a leader willing to explore unconventional avenues to maintain his relevance. But whether these tactics will translate into a successful political comeback remains to be seen.

Pakistan’s political future is more uncertain than ever. Imran Khan’s journey from cricketing legend to political maverick has been extraordinary. Still, as he faces the toughest challenge of his career, the question remains: Can he once again defy the odds and reclaim his place at the helm of Pakistani politics, or is this the beginning of the end for a once unstoppable leader?

Khan’s story is a testament to the complexities of power and the unpredictable nature of political life in Pakistan. His rise, driven by charisma, populism, and a genuine desire for change, now faces the realities of personal and political challenges, raising the possibility that his time may be running out.

Imran Khan is a beacon of hope for his supporters, and a polarizing figure for detractors, whose ambitions have often clouded his judgment. As the nation watches, the world is left to wonder: What will Imran Khan’s next move be? And more importantly, what does it mean for the future of Pakistan? The coming months will be critical not only for Imran Khan but for Pakistan as a whole. The decisions made during this period will shape the country’s trajectory for years. Whether Khan emerges victorious or is consigned to the annals of history as a fallen leader, one thing is certain: The story of Imran Khan is far from over.

(The writer is a senior jounalist based in Islamabad. Views personal)

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