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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 Last Post

Jul 18, 2025
3 min read

France’s final military withdrawal from Senegal closes an era in West Africa marked by colonial hangover, geopolitical missteps and the rise of rival powers like Russia and China.

France’s departure from its last permanent military base in West Africa—Camp Geille in Senegal— was a geopolitical funeral march. After six decades of military entrenchment across its former colonies, France’s final exit from Senegal symbolises not just the end of an era but a profound reckoning with its diminished standing in a region it once considered its pré carré.


General Pascal Ianni, France’s top military commander in Africa, insisted the exit marked a “new phase” in Franco-African military relations. It is more accurately read as a capitulation to the political and popular mood across West Africa, where post-colonial sentiment has hardened into full-blown rejection of foreign troops, especially those wearing French uniforms. President Bassirou Diomaye Faye of Senegal, elected earlier this year on a platform of sovereignty and pan-Africanism, made clear that foreign bases were incompatible with the republic’s dignity. The French departure, he implied, was non-negotiable.


The move follows a broader pattern. In Mali, Burkina Faso and Niger, military juntas have not merely expelled French forces but have replaced them with Russian mercenaries from the Wagner Group (now operating under a new Kremlin-controlled umbrella). Ivory Coast and Chad saw their last French bases shuttered earlier this year. What remains is a skeleton presence in Gabon and a training detachment in Côte d’Ivoire—pale shadows of France’s once expansive African garrison.


This withdrawal is the culmination of years of diplomatic inertia and military overreach. France’s once-popular counterterrorism operations—first in Mali with Operation Serval and later with the broader Operation Barkhane—began with fanfare but ended in ignominy. Perceived by locals as colonial meddling and marked by limited tangible success, French troops became symbols of both occupation and impotence. Terrorist violence did not ebb; civilian trust in Paris evaporated.


The geopolitical consequences of this exodus are significant. France’s absence has created a power vacuum, swiftly being filled by Russia, which sees Africa as fertile ground for influence, arms deals, and resource extraction. The Central African Republic is already a Wagner-run fiefdom in all but name. Burkina Faso and Mali now openly parade Russian armoured vehicles and advisors. In Niger, the junta that toppled President Mohamed Bazoum—a Western ally—immediately turned its gaze toward Moscow. China, too, is deepening its military and infrastructural ties in the region, though with less theatre than the Kremlin.


By contrast, France’s pivot to a more “flexible partnership model” (as Colonel Guillaume Vernet described it) sounds less like a strategy than an admission of defeat. The promise to offer training and “targeted support” assumes African nations still want such assistance from Paris. Many do not. Even the usually measured Senegalese military, once a key partner in West African peacekeeping, now insists that defence autonomy trumps foreign help.


Yet it would be hasty to see this solely through the prism of France’s failures. The withdrawal also reflects the transformation of African politics. Senegal’s new leadership joins a growing wave of pan-Africanist sentiment, particularly among younger voters. They want not just the trappings of sovereignty but its substance—military, economic and political. This aligns with broader BRICS-aligned rhetoric that pits the Global South against the neocolonial West.


Still, sovereignty has its price. Russia’s support comes with strings—opaque mining contracts, mercenaries with poor human rights records, and alignment with autocratic tendencies. France may be gone, but African nations now risk trading one master for another, especially if the West fails to offer viable alternatives. The United States, too, has scaled down its military presence in places like Niger. If democratic governance continues to erode in the Sahel, no amount of sovereignty will prevent the region’s slide into armed instability.


France’s military pullout is in a sense, the beginning of a new, more uncertain geopolitical story in which Africa is no longer just a theatre for European power projection but an active, if fragmented, actor in its own right.


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