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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.

The Art of the (Middle East) Deal

Writer: Kiran D. Tare
Kiran D. Tare
Jun 28, 2025
3 min read

Though elected on an isolationist promise, President Trump’s Middle East doctrine has alarmed MAGA purists by embracing strength and strategic entanglement.

Within hours of bombing Iran’s nuclear facilities in Fordow, Natanz, and Isfahan, Trump, with characteristic bombast, declared victory and called for peace, while warning both Iran and Israel to respect his unilateral ceasefire. The so-called ‘12-day war’ ended leaving Trump’s anti-interventionist supporters in ideological freefall.


For a man elected to end forever wars, a careful examination shows that Trump’s Middle East doctrine has proven anything but isolationist. The Iran strikes disappointed the MAGA faithful, sending many of Trump’s supporters into paroxysms of rage.


Trump is willing to engage in short, kinetic bursts of action to secure national interests. His administration has certainly renounced the liberal interventionism that followed the Cold War, which was protracted, expensive and morally freighted, and replaced it with a doctrine of calibrated unilateralism. Each strike is a show of force and each threat a test of nerve in this Trumpian doctrine.


Trump’s Middle East doctrine marks a clear departure from his predecessors. Whereas George W. Bush pursued grand ideological crusades in Iraq and Afghanistan, and Barack Obama sought to recalibrate American influence through diplomacy and multilateralism, Trump has favoured coercive pragmatism.


The clearest example remains Trump’s 2020 assassination of Qasem Soleimani, Iran’s most powerful general and regional powerbroker. Where conventional politicians might have balked at killing a sovereign state's top commander, Trump pressed the button. “To terrorists who harm or intend to harm any American, we will find you; we will eliminate you,” he said, before issuing a warning to Tehran: “We are ready and prepared to take whatever action is necessary.”


Trump has weaponised economic coercion with the same theatrical style. In 2019, when Turkey launched an offensive against America’s Kurdish allies in Syria, Trump responded by threatening to “destroy” the Turkish economy, imposed sanctions on officials, hiked tariffs and dispatched Mike Pence and Mike Pompeo to Ankara. Within two weeks, a ceasefire was brokered. Sanctions were lifted and American forces withdrew.


The same playbook was deployed over the fate of Andrew Brunson, an American pastor imprisoned in Turkey. When President Erdoğan refused to release him despite a diplomatic quid pro quo, Trump imposed Magnitsky sanctions, doubled tariffs on Turkish metals and tanked the lira. Erdoğan eventually yielded.


If coercion is the stick, recognition is the carrot. On a surprise visit to Riyadh in May this year, Trump, to the shock and surprise of many, announced the end of American sanctions on Syria, now under new leadership of Ahmed al-Sharaa, once the commander of Jabhat al-Nusra - al-Qaeda’s Syrian franchise. “It’s their time to shine,” Trump declared.


What binds these episodes together is Trump’s rejection of post-9/11 orthodoxy. In 2017, he declared America would “no longer use military might to construct democracies in faraway lands.” He praised the Gulf states for charting their own course while criticizing erstwhile American regimes for having wasted trillions in Baghdad.


Trump’s message, in this sense, has remained consistent, if not always comfortable for his most ardent backers. His decision not to immediately withdraw from Afghanistan early in his presidency earned him scorn from Breitbart, a longtime cheerleader.


Still, he has largely governed as he promised - not by retreating, but by refusing to remake the world in America’s image.


This doctrine has delivered episodic wins on Trump’s terms but limitations are evident in his struggle to contain more complex conflicts. Despite lofty rhetoric and arm-twisting, Trump has failed to bring either the Gaza war or the Russia-Ukraine conflict to heel. Allies may chafe and MAGA purists may grumble, but for Trump, projecting power remains the proof, and not the contradiction of ‘America First.’

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