Government warns sugar industry against fluctuating prices
PUNE: The government has warned sugar industries in the country that it can take all the ‘necessary’ steps to control sugar prices and that the industry should not be under the notion that the government cannot do it due to elections in certain states. Representatives of sugar mills have advised millers to avoid getting caught with speculation.
As sugar prices crossed government’s comfort level of Rs 40/kg in wholesale, the food ministry has conveyed to the sugar industry that ‘the government at the highest level is concerned about the sudden increase in sugar prices in last 8 to 10 days.’
“The government thinks that the recent increase in sugar prices is unnecessary and is more due to speculation,” stated a letter issued by ISMA to its member. The government has warned the industry that it will take all possible steps to control prices and that the industry should not be under the wrong notion that the government cannot take steps to control prices because of elections in some states.
Following the concerns shown by the government, industry body ISMA has cautioned its members to not get caught with the speculation in the market and be ‘patient and reasonable’.
At the same time, T Sarita Reddy, president, ISMA pointed out that, though sugar prices have gone up, we also have to realise that the cost of sugar production has also increased drastically.
However, Reddy said, “If the government decides to import sugar, it can be a disastrous move. It will take the prices crashing down and cane payment to farmers will suffer.
NCDEX has already increased special cash margin on buyers by 20% to 45%. A 5% additional margin already exists taking the total to 50%. Along with an initial margin of 5% the total margin to trade is 55%.
Source: ECONOMIC TIMES