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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.

Two lakh deaths - but who cares? 

Writer: Abhilash Khandekar
Abhilash Khandekar
Dec 6, 2025
4 min read

India’s lethal air has become so routine that even mass mortality now struggles to provoke political urgency.

 

India’s national capital is choking as it always does, under a winter blanket of smog that has long ceased to shock. Delhi Chief Minister Rekha Gupta has responded by urging half the city’s office workforce to work from home - a palliative that only serves to starkly underscore the enduring helplessness of governments in tackling the poison in the air.


Delhi is not the only city which is battling deteriorating air quality; there are many Indian cities going through the environmental ordeal. Mumbai, Kanpur, Indore, Ghaziabad, Jaipur, Hapur and NOIDA are the other cities.


I vividly recall the Union Minister for Forest and Environment and Climate Change (MoEFCC), Prakash Javdekar who had boasted in Parliament that his ministry would tackle pollution quicker than what China did. Javdekar’s last stint as MoEFCC was in 2021. He was twice in charge of this key portfolio but pollution levels grew constantly year after year. His claims for NCR in 2019 remain on paper only.


Delhi’s thick air has been floating low for decades during which Congress, BJP and AAP ruled the historic city; they had all claimed to have addressed it while also blaming each other for the sake of optics. Meanwhile, Delhiites have been endlessly suffering smog, inhaling fine dust particles and facing vehicular pollution. Delhi has two crore citizens and a big floating population of neighbouring Rajasthan, UP, Punjab and Haryana daily, making the Indian capital clearly unliveable by any standard. Isn't it a national shame?


Beijing lesson

I visited Beijing in 2008, the year when the Summer Olympics were to be held in the Chinese capital. (Incidentally, the city is the only city which hosted summer and winter Olympics in the history of the games). The government there was much worried about its global image and had put in place everything possible to clear the skies before the athletes from across the world converged upon the ancient city in 2008. The winter games were held much later in 2022. The two Olympic Games within the space of 14 years display the seriousness and magnitude of efforts, as also Government’s genuine commitment towards the sportspersons and citizens alike. We can blame China for many things but can also learn a lot, if we wish to.


So, when BJP’s CM Gupta announces restricted hours of schools and reduction of traffic by permitting 50 percent staff to attend offices, one wonders what did the Union Environment Ministry do under Javdekar.


BJP inherited the challenge from Congress when Narendra Modi became the Prime Minister in 2014. Similarly, Rekha Gupta inherited air and river pollution from the AAP Government.


Like Javdekar, motor-mouth Arvind Kejriwal, too, had made umpteen promises about cleaning up the air but they were meant to make headlines more than combating the dangerous air pollution through scientific programmes.


During the recent Chhat Festival, the Yamuna river’s pollution again came to the fore with the shameless Delhi government making a separate small place for VIP dip into cleaner water that was brought through pipelines. It was a puerile effort to divide the smelly, frothy river into two.


As per estimates of a number of international agencies and NGOs, India loses a staggering two lakh people due to air pollution each year. Going by this, under the BJP government at the Centre, India lost at least 20 lakh people owing to diseases related to toxic air breathing.


Should the citizens not be up in arms to defend their lives? Just like Javdekar, Nitin Gadkari, in charge of roads and highways, had been claiming that he would try to reduce road mishaps and deaths. That figure is also bone-chilling - 1.50 lakh per year. But road accidents continue to claim precious lives of Indians, almost daily.


I know Javdekar or Gadkari or Modi alone cannot provide answers to pollution or mishaps but the Government can certainly create robust systems and laws to overcome this herculean challenge. So far, they have failed miserably. Aravali mountain range is under threat; trees are being cut ruthlessly and massive infrastructure is adding to dusty air.


Interestingly, London’s Mayor, Sadiq Khan, had contested his second term promising Londoners that of less pollution. He did that and won the second term. He is serving the third term since 2016.


India, under BJP, is busy erasing all signs of colonialism. It also has a logical hatred for China. All that is fine. But why can’t we learn good things from them to save the lives of Indians? India needs technology and university campuses from the UK but not interested to know what a Mayor does in the globally known beautiful city. We may abhor China (many electronic items and other raw material, including bronze cladding of Sardar Patel statue in Gujarat came from China) but why can’t we learn the art and science of mitigating pollution from them? After all it is the question of lakhs of Indian lives.


(The writer is a senior political and environment journalist based in Bhopal. Views Personal.)

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