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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.

REIT market surges ahead, says report

Writer: Bhalchandra Chorghade
Bhalchandra Chorghade
Apr 3
3 min read

Mumbai: India’s Real Estate Investment Trust (REIT) market is witnessing strong momentum, positioning itself as a compelling investment avenue both domestically and in comparison with Asian peers, according to a latest report by ANAROCK.


Titled ‘India REITs: Taking a Stride - Building Momentum with Scale & Performance’, the report was released on the sidelines of EXCELERATE 2026, a finclave organised by NAREDCO Maharashtra NextGen. It highlights that India’s REIT sector is rapidly evolving into a mature and high-performing asset class, backed by robust fundamentals, regulatory support and growing investor confidence.


A key development underpinning this growth is the introduction of Small and Medium REITs (SM REITs) in 2025, which has enabled wider retail participation through a fractional ownership model. The report estimates that SM REITs could unlock monetisation opportunities worth Rs 67,000 crore to Rs 71,000 crore, significantly expanding the investment base.


India’s REIT market has also emerged as increasingly competitive within Asia. According to the report, it has already achieved a scale comparable to established hubs such as Hong Kong. Indian REITs have delivered superior five-year price returns of nearly 9 per cent, outperforming several regional counterparts, while maintaining attractive distribution yields in the range of 5–6 per cent


Strong Pillar

Operational performance remains a strong pillar of the sector’s growth. Portfolio occupancy levels across Indian REITs have consistently remained above 90 per cent, with tenants comprising global corporates across sectors such as technology, BFSI, consulting and telecommunications. The report notes that REITs accounted for over 20 per cent of pan-India office leasing activity in the second quarter of FY26, supported by healthy re-leasing spreads and mark-to-market rental upside, indicating sustained income growth potential. Since their respective listings, Indian REITs have delivered capital appreciation ranging from about 12 per cent to over 60 per cent, alongside steady distribution yields.


Tax efficiency is another major factor enhancing the appeal of REITs. Regulatory norms require REITs to distribute at least 90 per cent of their net distributable cash flows, making them particularly attractive to income-focused investors. Additionally, over 65 per cent of REIT distributions are tax-exempt in the hands of investors, significantly improving post-tax returns.


Growth Trajectory

Looking ahead, the report projects a promising growth trajectory for the sector. Currently, only about 32 per cent of India’s REIT-worthy assets are listed, leaving significant headroom for expansion. The report also highlights diversification into emerging asset classes such as logistics parks, data centres, healthcare infrastructure and residential real estate, which is expected to broaden the investment landscape and enhance yield opportunities.


Introduced by the Securities and Exchange Board of India (SEBI) in 2014, REITs were aimed at formalising and democratising real estate investments by offering liquidity, diversification and stable income streams. India currently has five listed REITs spanning premium commercial office and retail assets, collectively managing over 176 million square feet of leasable area. Since the first listing in 2019, the sector has grown steadily, supported by institutional participation and progressive regulatory reforms.


NAREDCO Maharashtra NextGen organised EXCELERATE 2026 as a one-day international conclave to bring together global and domestic stakeholders to discuss the future of real estate investment and financing in India.


Talking about the finclave, Vikas Jain, President, NAREDCO Maharashtra NextGen said, “India’s real estate sector has undergone a remarkable transformation over the past decade. Investor confidence, both domestic and international, is at an all-time high. Platforms like EXCELERATE 2026 will play a critical role in bringing together global and domestic stakeholders to exchange ideas, explore capital partnerships and accelerate the next phase of growth for Indian real estate.”


Dr Niranjan Hiranandani, Chairman Emeritus, NAREDCO Maharashtra, said, “India’s real estate sector is at an inflection point, with urbanization set to rise from 35 per cent to nearly 50 per cent by 2047, fundamentally reshaping demand and development patterns. The industry has already transitioned from reliance on family funding to more institutionalised capital through private equity and REITs and is steadily evolving into a global asset class.”


The conclave featured a series of high-level panel discussions on emerging capital sources, investment strategies and future asset classes, including family offices, private equity, sustainability, data centres, branded residences, and the role of REITs and InvITs in unlocking institutional and retail capital.

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