Sugar industry shifts blame on traders for price spiral

Questions govt data on prevailing prices.

The sugar industry on Wednesday blamed wholesalers and retailers for the sharp rise in sugar prices and pointed out the discrepancies in the price data compiled by the government for major cities, sources said.

The industry representatives met Food and Agriculture Minister Sharad Pawar to discuss the reasons behind higher prices in North India, particularly in New Delhi.

BLAME GAME

• Sugar prices have risen sharply over the last two months and are ruling at Rs 27-28 in most cities 
• In Lucknow, sugar is available at Rs 26-27 a kg while the government data shows the price to be Rs 30 a kg
• Production in 2008-09 season is estimated at 14.8 million tonnes, down 44 per cent from previous season

Earlier this week, Pawar had said that sugar prices in New Delhi were higher than Kolkata despite the national capital’s proximity to Uttar Pradesh, the second-largest sugar producing state. Representatives of the Indian Sugar Mills Association (ISMA) and the National Federation of Cooperative Sugar Factories attended the meeting.

Leading millers of North India such as Bajaj Hindusthan and Balrampur Chini were represented at the meeting. Sources said some millers blamed wholesalers and retailers for higher prices in North India while others said rates were lower in Kolkata because of the commissioning of the Haldia refinery.

Industry officials also questioned government data, saying that they indicated higher prices than the prevailing market rates, sources said. According to the millers, the sweetener was available at Rs 26-27 per kg in Lucknow while government data showed Rs 30 per kg.

After taking charge for the second consecutive term on May 25, Pawar had expressed concern over higher prices. Sugar prices have risen sharply over the last two months and are sold at Rs 27-28 in most cities. Prices were in the range of Rs 18-23 in October 2008, the beginning of the new sugar season. Some millers favoured the start of the crushing season from November as they felt the recovery rate would be lower if cane was crushed from October.