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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.

What If Eisenhower Had Raced for Berlin?

Sep 25, 2024
3 min read

Updated: Oct 21, 2024

Eisenhower

Imagine a Cold War without the Berlin Wall – that iconic symbol of a stark ideological divide adorned in the covers of books by every major spy thriller writer from John le Carré to Joseph Kanon. A divided Berlin has been emblematic of the Cold War (1945-91). In this context, one cannot help asking a counterfactual often asked in the past – what if the Supreme Commander of the Allied Expeditionary Force in Europe, Gen. Dwight D. Eisenhower, had opted to push east and race the Soviets to Berlin?

In the spring of 1945, as Hitler’s Third Reich lay in ruins, Eisenhower made a fateful decision: to halt American and Allied forces at the Elbe River and allow the Soviet Red Army to take Berlin.

Had Eisenhower pushed for Berlin, the Cold War might still have occurred, but it would have been a different conflict. A united Germany, neutral or aligned with the West, would have weakened Soviet power in Europe. Berlin, without its iconic wall, would not serve as the stark symbol of ideological rivalry.

The nature of Postwar Europe would have been profoundly altered. The Cold War would have swung in a way favourable to the West, or perhaps its inception may have been prevented altogether.

The absence of Berlin as a flashpoint could have led to fewer tensions in Europe, and NATO’s formation might have shifted in focus.

What prevented Eisenhower from ordering the dash to Berlin? In his thrilling classic ‘The Last Battle’ (1966), author Cornelius Ryan shows how Soviet dictator Joseph Stalin cleverly outmanoeuvred Eisenhower diplomatically, convincing the Allied Supreme Commander that Berlin was not worth the cost. Through a campaign of misdirection, Stalin minimized the military significance of Berlin, presenting it merely as another urban battleground while emphasizing other military priorities.

Eisenhower, pragmatic by nature, thought it prudent to avoid a bloodbath in Berlin and focus on defeating the remaining German armies across central and southern Europe. Another factor in Eisenhower’s decision to forego Berlin was the intelligence, later revealed to be exaggerated, suggesting that Hitler, along with remaining SS units and German divisions would make a last stand in his ‘Alpine Redoubt’ bastion. As it turned out, the Allies found no well-organized Nazi stronghold and Hitler, far from fleeing to the Austrian Alps, remained holed in his Berlin bunker, awaiting the end.

In a noted book-length essay, Eisenhower and Berlin, 1945: The Decision to Halt at the Elbe (1967), historian Stephen Ambrose, Eisenhower’s official biographer, critiqued Ryan’s work by underscoring that the general saw no value in sacrificing American lives for symbolic prizes like Berlin.

However, if Eisenhower had ordered the armies of Field Marshal Montgomery and Gen.Omar Bradley to take Berlin, the post-war landscape would have looked very different. This does not mean the Cold War would vanish. But the intensity of the Cold War, that characterized postwar Europe, would have been channelized in other regions, such as the Middle East, Southeast Asia and Africa (where it eventually did with great intensity and loss of life).

That said, Stalin’s paranoia about Western intentions, evidenced by his brutal consolidation of power in Eastern Europe, would still persist. Moscow would still desire a buffer zone, likely seeking control over Poland, Hungary, and Czechoslovakia. However, with Berlin in Western hands, Stalin’s expansion might have been less aggressive, and the tension between East and West more political than militarized.

Eisenhower’s pragmatic decision to halt at the Elbe had profound implications for the postwar order. The question of whether a bolder approach might have significantly altered the geopolitical landscape of the 20th century is now an academic one.

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