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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 Battle for a Quieter Ganeshotsav

Writer: Rajendra Pandharpure
Rajendra Pandharpure
Aug 30
3 min read

As DJs, Dolby systems and crowded mandaps return, Pune residents are pushing back against noise and traffic during the city’s biggest festival.

Pune: The majority of the city’s residents have impotently opposed the use of ear-splitting DJ systems during the Ganeshotsav festival year after year. This year, citizens are voicing their opposition through various channels, while also expressing strong disapproval of festival mandaps (temporary pavilions) that obstruct traffic.

 

Mayor Manjusha Nagpure had convened a meeting at the Pune Municipal Corporation (PMC) for activists from Ganeshotsav mandals and citizens to discuss preparations for the festival. During the meeting, Vidyanand Bapat, a young environmental enthusiast, argued that loudspeakers should be banned during the festival and suggested moving the celebrations outside the city limits.


He was immediately challenged by other activists, mandal workers. As tensions rose in the meeting, police and municipal security personnel intervened, forming a protective ring around Bapat and escorting him out safely. A video of this incident went viral on social media, sparking a city-wide debate on the issue.


Incessant Noise

Later, in an interview, Bapat stated, “I live in Narayan Peth. Residents of the peth areas face constant disturbance for a month or even a month and a half during the festival specifically due to noise pollution and traffic congestion. For a month prior to the festival, Dhol-Lezim troupes practice along the riverbanks. The noise drives residents to distraction, yet they feel unable to speak out. Sound amplifiers, whether DJ systems or loudspeakers, must be banned entirely. Erecting mandaps on the narrow streets of the peth areas is simply wrong. The nature of the festival needs to evolve with the times; celebrations should be held in open spaces outside the city.”


Bapat suggested that processions on six-lane roads should proceed along only one side. He also stated that he does not accept the Hindu-Muslim narrative being attached to this demand, noting that he is a rationalist himself. Following this incident, citizens from various areas have voiced their opinions to the police department. An appeal was made for Punekars to gather at a junction in Deccan Gymkhana to advocate for a DJ-free festival, a call that is receiving a massive response.


A statement issued on behalf of the citizens reads, “We do not oppose the festival itself; we support the constructive activities associated with it. However, we object to the excessive use of Dolby sound systems and DJs in the name of the festival.”


Legal Recourse

Certain organizations and groups have even approached the courts to oppose the excessive use of DJs. The Police Commissioner has imposed restrictions on DJ sound levels and completely banned the use of plasma and laser technologies. Commissioner Amitesh Kumar has warned that if these limits are violated, the equipment will be confiscated on the spot.


Regarding the use of DJs, Union Minister of State Murlidhar Mohol stated that there is absolutely no place for plasma screens, high-pressure sound systems, and laser lights in the festival. While the police have imposed restrictions on the number of performers and instruments in Dhol-Tasha troupes, Mohol holds the view that such restrictions should not be unreasonable. Meanwhile, BJP Rajya Sabha member Medha Kulkarni has taken a firm stand, declaring that ear-splitting DJs have no place in the festival.


In the Peth areas (old city neighbourhoods), mandals have begun erecting marquees in accordance with permits issued by the Municipal Corporation and the police. As a result, citizens have to face the brunt of traffic congestion throughout the day. Rickshaw drivers refuse passengers owing to the logjams created by these mandaps. In fact, crossing a relatively short stretch from Tilak Road to Alka Talkies becomes a herculean task. While environmental activists have begun to speak out with force against the excess during festivals, it remains to be seen what actually happens during the festive period.

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