Sugar hoarding results in price hike

It’s not a good year, particularly if you have a sweet tooth. If the market figures show any indication — Rs 21-22 a kilogram now ...

It’s not a good year, particularly if you have a sweet tooth. If the market figures show any indication — Rs 21-22 a kilogram now from Rs 16 two months ago — the prices of sugar may not be that appetising.

According to Prakash Naiknavare, MD, Maharashtra Co-op Sugar Federation, ‘‘Sugar prices will stand firm at these levels. In fact, it will not go below Rs 17.50 per kg till end of December.’’ But he was quick to assert that the immediate price hike was mostly speculative in nature.

According to Naiknavare, the immediate step would be to reactivate the storage and handling restrictions provision as stated in the Essential Commodity Act, 1955. The provision stresses that at no level — retail, wholesale or in the pipeline — can a trader stock more than 100 tonnes of sugar.

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‘‘At present we have reports where traders are storing more than a lakh tonne at their respective ends, generating artificial scarcity. We need to puncture this pipeline for the prices to come down,’’ he added.

Apparently, the country produced around 202 lakh tonnes of sugar in 2002-03, which prompted the government to remove the provision.

With excess sugar, such a restriction would have lopsided the market. A lower production estimated at 125 lakh tonnes — lowest in ten years — has prompted hoarders to go for the kill.

Another safety measure, the quarterly quota, which the Centre issues for every three months is also slated to be at a higher level compared to the 2003 levels.

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