The Indian sugar industry, which is reaping the fruits of better prices, has made a fresh appeal to the Centre to reduce the present weight of 3.62 of the commodity in the wholesale price index (WPI).
The industry has called for bringing it on a par with cement and diesel, which are at a level almost half of sugar. Various organisations, including Indian Sugar Mills Association, the National Federation of Cooperative Sugar Factories and the Federation of Cooperative Factories in Maharashtra are at the forefront to take up the issue with the Centre, especially when there has been much hue and cry over a spurt in sugar prices.
Industry sources told Business Standard on Friday: “In the last couple of years, sugar has been given erroneously higher weight and it has always been considered that higher weight and prices of sugar are major contributors to the food inflation.
The industry has repeatedly argued that sugar is not an essential commodity in the sense that it is not part of the common man’s staple food. The demand has also been made that sugar be removed from the list of essential commodities, thereby relieving it from the clutches of the Essential Commodities Act. However, the Centre has yet to take a call on this.
The chairman of a cooperative sugar factory from Maharashtra and a former minister, who did not want to be quoted, justified the industry’s demand to reduce the weight attached to sugar in WPI. “One argument is that the per capita sugar consumption in the country is just 20 kg a year. Thus, a family of four people, consumes 80 kg of sugar in a year and their monthly consumption is as low as 6-7 kg. Therefore, the price of Rs 10 per kg does not disturb the family budget beyond Rs 60-70, which is the cost of three bottles of mineral water.”
Against this backdrop, a private miller said the sugar consumption pattern was grossly titled towards industrial usage — namely soft drinks, sweetmates, chocolates and beverages and ice creams. That leaves household usage to just around 25 per cent.
“In light of these facts, the hue and cry raised over the rise in sugar prices is not justified. At present, the ex-mill price is Rs 3,100-3,200 and, at the consumer level, it comes to Rs 35-36 per kg. Thus, the Centre should soon take a decision of bringing sugar weight on a par with diesel and cement,” the private mill operator said.
Federation of Cooperative Sugar Factories in Maharahtra Managing Director Prakash Naiknavare said: “The government needs to take a decision quickly for the larger interest of the sugar industry. I want to make it clear that 70 per cent of the ex-mill price directly goes to farmers in the form of sugarcane price. A large number of sugarcane farmers are marginal farmers and if they get better cane price, it should not create heartburn for the affluent class.”
