Rising prices of sugar has forced the Centre to act as the festival season and Maharashtra’s assembly polls are around the corner.
The sugar prices in retail market are up to Rs 40, which has angered people in Maharashtra — India’s sugar bowl.
The situation has reached to this point due to three factors. First, a bumper crop in 2007 and 2008 followed by sharp fall in prices forced many sugarcane farmers to turn to other crops.
Second, a bad monsoon this year worsened the situation as there was shortage of sugarcane. Third, greedy middlemen are hoarding sugar in a bid to make more money as they know that the demand would soar during the festival season (Navratri, Diwali and Ramzan Id) which is just approaching.
People in government are also blaming the rise on the good old economic cycle.
“The sugar industry works this way. After every three years of high growth, we traditionally have two years of glut. This year the situation has been complicated by the bad crop,” Pawar said in Mumbai last Friday.
The State contributes to one third of India’s sugar production. The factories, mostly co-operative, are concentrated in western and central Maharashtra.
{{/usCountry}}The State contributes to one third of India’s sugar production. The factories, mostly co-operative, are concentrated in western and central Maharashtra.
{{/usCountry}}Maharashtra’s share has also fallen drastically from 91 lakh tones in 2008 to 46 lakh tones this year.
This has lead to an unprecedented hike in sugar prices. In Mumbai alone sugar prices have jacked up from Rs 20-22 last August to Rs 35 to Rs 40 now. According to the traders, the hike is highest in at least three decades.
"These are record sugar prices that have never been witnessed in the history of our association. The highest the price had been in the wholesale market was Rs 25. But this is unprecedented." Ashok Jain, president of The Bombay Sugar Merchants' Association Limited said.
The industry insiders also believe that apart from the effects of nature, the governments decision to control sugar flow in the Indian market is also playing a role in keeping prices high.