Early Times Report
Kolkata, Aug 21: Retail sugar prices have shot up to Rs 70 per kg in Kolkata markets ahead of the festive season, traders said on Friday.
Prices have surged by Rs 20 a kg in the past month alone, while the last four to five days have seen a sudden 10 per cent jump, they said. Sugar-associated products such as jaggery, batasa (sugar drop), and nakuldana are also witnessing a similar spike.
The Centre on Thursday evening allowed sugar mills to import one million tonne of raw sugar, a measure last resorted to a decade ago, but its impact is yet to trickle down to retail markets, traders said.
The government has also imposed a stockholding limit on bulk customers who consume more than 10 tonne of sugar a month, capping their stock at 15 days' consumption.
Confederation of West Bengal Trade Association (CWBTA) president Sushil Poddar said there was no control over sugar mills, with wholesale prices already touching Rs 65 a kg.
"I sold loose sugar at Rs 65 just three days ago, but today I can't sell below Rs 70 a kg," a neighbourhood kirana store owner said.
"There is no control on sugar mills. Wholesale prices have already shot up to Rs 65 a kg, and retail prices will reach about Rs 70 a kg. Diversion to ethanol is one of the key reasons. Moreover, higher blending is also damaging vehicles now," Poddar said.
"The sudden sugar price spike ahead of the festival season, between September and November, is a matter of concern. The government allowing import of one million tonnes of raw sugar will not be enough to stem the rise, and more interventions are needed," he said, adding that one million tonne was just about a fortnight's domestic demand.
Lower sugar production in Brazil has also added to the woes, traders said.
Sweetmeat shop owners said that after the LPG crisis and price hike, elevated commodity prices have now put further pressure on sweetmeat makers, with prices likely to rise further if sugar rates remain elevated for long.
West Bengal minister Dilip Ghosh blamed the sugar price spike on hoarding and not on ethanol blending.
However, an official of a leading sugar mill company said crushing had ended in April and mills were only releasing stock now, adding there was little more that mills could do at this stage.
According to a report by rating agency ICRA in May, gross sugar production for sugar year 2026 (SY2026) is projected to rise 5.03 per cent to 31.10 million tonnes, against 29.6 million tonnes in the previous year. Net sugar production, after an estimated diversion of 3.1 million tonne towards ethanol, is likely to remain at 28 million tonne, it said.
Considering domestic consumption of 28.3 million tonne and exports of 0.7 million tonne already undertaken, closing sugar stock is expected to be around 4.3 million tonne by September 2026, against 5.3 million tonne in the previous year, the report said, adding that this was about two months of consumption, indicating slightly lower inventory levels compared with previous years.
The report further said the SY2027 season is expected to be impacted by El Nino, which may result in lower sugar production. |
