Swabhimani Paksha MP Raju Shetti has requested the Union finance minister for a probe into future trading in commodities exchange NCDEx. Shetti has alleged that a handful of traders are indulging in circular tradings in the markets, which is affecting the sugar sector at large.
While millers in Maharashtra complain of low movement in the sugar trade, the NCDEx exchange has seen bullish trade in the commodity. The Indian Express had reported on how between July and December, 35 lakh tonnes of sugar worth Rs 9,318.41 crore were traded on the platform (Sugar prices go up but millers say no gains: The Indian Express, January 2).
However, millers had said that there weren’t enough takers in the market for sugar. In his letter, the farmers’ leader pointed out how last year, 52 lakh tonnes of sugar were traded, but only 65,000 tonnes were actually delivered.
Shetti, in his letter, has alleged that trading on the NCDEx platform was being performed in the name of dummy companies who are indulging in circular trading. “They are interlinked and this can be traced from their source of finance and IP addresses of their trading platform. I request you to conduct a detailed inquiry on the same,” he wrote.
Sugar prices has been on a sinusoidal wave with prices dipping to Rs 1,900 per tonne in July last year. Low sugar prices along with a glut in the international market had caused a bloodbath in the industry in the state with millers failing to pay growers.
The state had started with cane arrears worth Rs 1,000 crore with many mills still carrying forward the spill over. Shetti alleged that the price was artificially reduced and a large quantity of sugar was purchased by traders who are now selling them in the open market at huge margins.
The MP further claimed that unwarranted drop in prices had resulted in a loss of Rs 15,000 crore to the sugar industry. Requesting strong action against such trading, Shetti said that speculative trading always results in losses for farmers.