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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.

Clever seat selection helped BJP to secure historic win

Writer: Ruddhi Phadke
Ruddhi Phadke
Nov 29, 2024
2 min read

The party won 65 seats against Congress, 37 against NCP (SP) and 29 against Shiv Sena (UBT)

Clever seat selection

Mumbai: The BJP’s strategic seat sharing with the allies has proved beneficial for the party. An analysis of the Assembly election results show that the BJP has scored over its main rival, the Congress, in a big way because of the direct fights.


The analysis shows that BJP defeated all three constituents of the Maharashtra Vikas Aghadi (MVA) – Congress, Shiv Sena (UBT) and NCP (SP) – in the direct fights. This is attributed as one of the reasons for the BJP’s historic poll success.


The BJP contested 147 out of 288 seats. In 76 constituencies, it faced Congress. BJP secured victory in 65 seats and lost only 11 seats, making it a whopping 86 per cent of the total direct fights. This was followed by an even stronger performance against NCP (SP). Of the total 39 fights with Sharad Pawar’s party, BJP captured 37 seats making it 95 per cent of the total fights with NCP (SP). BJP and Shiv Sena (UBT) were head-to-head in 32 constituencies, of which BJP emerged victorious in 29 seats, making this 91 per cent of the total direct contests.


According to a BJP strategist the party had bargained hard with its allies, Shiv Sena and NCP to get the desired constituencies in the seat sharing formula. “We had studied to potential candidates of the MVA. That helped us in choosing the seats where we can register comfortable victories,” the strategist said.


BJP spokesperson Niranjan Shetty attributed the success to all the party workers who worked hard to boost development, infrastructure in the state. He gave credit to Deputy Chief Minister Devendra Fadnavis for his contribution to the party’s success.


Shetty pointed out that in 2019, Uddhav Thackeray had stalled all the “novel” and “legendary” projects that Fadnavis had started when he had taken over as CM, making it very easy for the people of Maharashtra to strike a comparison between both the leaders and the potential they had for serving the people. “Devendra Fadnavis gave up his post very easily for the larger good. There are many such examples like Venkaiah Naidu who was BJP National President and later worked as the Vice President of India because that was the need of the hour. We seldom care about our posts,” Shetty told The Perfect Voice.


Congress spokesperson Atul Londhe refused to call the election results as the people’s mandate. “This is not at all a Janata mandate. Despite Maharashtra struggling with so many basic social issues, how can BJP acquire such a huge mandate is the question. If a student copies and fails with just passing marks, it can go unnoticed, but if a student copies and bags the number one position, something is fishy. Why is the BJP scared of ballot papers?” he said.

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