Ahmedabad : Sugar prices are witnessing a significant increase across the country, including Gujarat. The price of regular sugar in the state has increased to around Rs.60 per kg, while refined sugar is being sold at Rs.65 per kg. Market participants say that the price increase is due to dwindling sugar stocks, increasing use of sugarcane for ethanol production and increasing demand during the upcoming festivals. The demand for sugar is likely to increase further with the start of the festive season. If the supply does not normalize before then, general consumers as well as sweet manufacturers may have to buy more expensive sugar in the coming days.

The biggest reason behind the increase in sugar prices is believed to be the decrease in the stock available in the mills. The supply coming to the market from sugar mills is decreasing and on the other hand, the use of sugarcane for ethanol production is increasing. Due to this, the pressure on the available quantity of sugar is increasing. During the upcoming festivals, the demand for various sweet products including laddu, mithai, panda, barfi is likely to increase. In this situation, if the gap between the demand and supply of sugar increases further, the price is likely to increase further. Currently, its impact is being seen from the wholesale market to the retail market.

The price of ordinary sugar in the Gujarat market has now reached around Rs. 60 per kg. While for more pure i.e. refined sugar, consumers are having to pay around Rs. 65 per kg. This increase in price can be a matter of concern especially for sweet shops, bakeries and food manufacturers. Since sugar is the main raw material for the production of sweets and many food items, the increase in its price directly affects the cost of production. If the price of sugar increases further, the prices of sweets and other food products are also likely to increase.

To control the price hike and supply situation, the central government has reduced the stock holding limit for wholesale sugar users to 15 days. The aim of this step is to prevent artificial storage of sugar in the market and maintain its continuous supply. Along with this, the mills have also been instructed to bring the available stock to the market quickly. According to the information received, the mills have also been asked to withdraw the stock within seven days. This step of the government is expected to increase the availability of sugar in the market and control the prices.

To ensure adequate supply of sugar in the country, the central government is also considering the possibility of importing duty-free sugar. If there is a shortage of sugar in the domestic market, additional quantity can be made available through imports. Imports will increase the supply in the market and can help control the rising prices. However, it will be important when and to what extent the government takes a decision on this. If a timely decision is taken, it can help keep the price of sugar stable during the festivals. On the other hand, if the improvement in supply is delayed, the price increase in the market may continue.

Currently, normal sugar is being sold at Rs. 60 and refined sugar at Rs. 65 per kg, while the increasing demand for the upcoming festivals has raised concerns. If the mills’ stock continues to decline, sugarcane continues to be used for ethanol production and the supply in the market does not increase sufficiently, then the price of sugar may rise further. In such a situation, the price of ordinary sugar is likely to reach Rs. 70 per kg during the festive season. If the price increases, there will be additional costs for household consumers as well as sweet manufacturers. Now the market is eyeing the government’s decision regarding imports and stock control.

Report – Abhijit Tushar Bhatt (Political Editor)