Jaggery (gur) prices have almost doubled, compared with last year, on a 30 per cent drop in production. However, it is not the jaggery producers who have made a killing at these high prices. In Uttar Pradesh, the gains have gone to sugarcane farmers who were paid prices as high as Rs 250 a quintal, well above the state advised price (SAP) of Rs 140-145 a quintal.
Since sugarcane output in the state declined by over 25 per cent on lower yields and diversion to crops like paddy, the jaggery producers initiated a price war with sugar mills for sugarcane and began the season paying Rs 150-160 a quintal against the SAP of Rs 140 a quintal. Jaggery units were able to pay this price since recovery was high and gur prices had also firmed up. They went on to pay a price as high as Rs 250 a quintal.
The diversion of sugarcane to jaggery producing units in a year when sugarcane output had seen a sharp decline forced the sugar mills to make prompt payments to the farmers this season (October-September). Most mills also offered a premium of Rs 15-20 over the SAP to farmers. The delayed payment by mills in the two previous seasons had left the farmers disappointed.
However, they could not match the average price of Rs 250 that was paid by the jaggery producers, said Arun Khandelwal, president, Federation of Gur Traders, Muzaffarnagar, Asia’s largest jaggery market. As a reason, diversion was estimated to be an all-time high this season. Sugar industry officials said a number of farmers did not even care to hold adequate quantity of sugarcane, as seed for planting, even though mills promised to pay a premium for such quantities.
Notably, jaggery prices have ruled well above sugar so far in the current season. While retail sugar is selling around Rs 29-30 a kg, jaggery prices range between Rs 34-35 a kg. Khandelwal says the jaggery price is reflecting the high prices that were paid for sugarcane.
