With the continuing blame game of ever high sugar prices between the centre and the Uttar Pradesh government, the retail prices are not known to come down any soon. Sugar is selling at Rs 50 per kg in retail markets in
In the international market, sugar futures are trading near a 28-year high of 27.49 cents a pound, mainly because of anticipated shortages in
Uttar Pradesh government has imposed a ban on processing of imported raw sugar since the farmers' protest over cane prices in November, leading to about 8 lakh tonnes of raw sugar lying at ports. Imported raw sugar has been lying at the ports for more than two months and the UP government is not allowing millers to process. On the other hand, the UP govt is openly blaming the Central policies for the muddle, which encouraged hoarders and blackmarketeers and suggested for revamping the policies. The Agriculture Ministry has already written to UP government for lifting the ban on raw sugar processing and accepted that they have not been able to convince the state govt, and will try to request at the highest level.
The central government missed all the red flags that pointed to a sugar shortage for almost a year, generated sharply varying estimates of cane production, and kept prices artificially depressed from October 2008, due to the state elections, leading to a situation where sugar prices is at about Rs 50/kg today, and likely to only rise further. The agriculture minister was not even ready to accept the insufficient production last cane season ending September – November and most of the times reiterated that we have enough stocks to keep the prices under tab. A report even revealed that the incumbent Govt. and Mr. Pawar was aware of sugar crisis a year ago. In the case, they should have imported sugar six months ago when the sugar prices of import was just Rs.17 per kg. Sensing the crisis, the exporting countries hiked sugar prices knowing that
In situations of insufficient availability, the millers would have processed an additional 2.5 lakh tons per month. If this extra processed sugar could become available, this would have brought down prices. Besides, states should take stern action against hoarders and speculators. Additionally, steps should be taken to check smuggling of sugarcane and sugar from
The lack of policy co-ordination among the Centre and States is also hindering government efforts to control prices. While the central government has been encouraging sugar mills to import raw sugar, the Uttar Pradesh has put ban on imports by mills in the state, resulting in some 900,000 tons of raw sugar being stuck at Indian ports. Some of the provincial governments are also slow to utilize the full quota of food grains released by the central government for distribution through welfare programs. While government officials have publicly stated they expect prices to fall in the coming weeks, fresh steps to control prices are a clear sign that the situation is still not under control.