The Hindu Business Line : Supply line planning can help curb sugar price rise: ISMA chief

THE President of the Indian Sugar Mills Association (ISMA), Ms Rajshree Pathy, observed that with proper planning of the supply line, sugar prices could be sustained at reasonable levels.

Reacting to the spiralling rate of sugar in the last fortnight, she said, ``the market is definitely speculative and this bull-run is against the interest of the industry. The industry sector feels that sugar prices should be allowed to rule at a reasonable level of say Rs 17 or Rs 18 per kilogram ex-factory.''

With improvement in sugar price realisation, the industry would be able to pay cane growers. This would have a positive impact on current planting and the subsequent years' production.

``It is a vicious cycle,'' she said and continued ``with better prices, factories would be able to discharge their liabilities not only to cane growers but also to financial institutions and enhance efficiency levels in the factory.''

ISMA, she said, was in constant dialogue with the Food Ministry for placing a check on abnormal rise in price levels.

``Even now, you will notice that only the bulk consumers of sugar are raising their voice. Why is the sugar industry targeted when end product rate of confectionary items or soft drinks are not scrutinised?'' she asked.

Sugar, she said, was quoting at around Rs 16 a kg in the early 90s when the cane price hovered at Rs 850 a tonne. But today, the cane is priced at over Rs 1000 a tonne.

``There is no commensurate increase in the price of white sugar. On the other hand, the cost of production has gone up considerably.''

The association has been suggesting to the Government to link cane pricing to sugar price realisation as is being done in other cane producing countries.

The industry, she said, regretted the decision of oil companies to suspend ethanol programme by seeking supplies at exceedingly low rates.

``The industry has invested huge sums. The built capacities are languishing, adding to our cost.

``After three years of drought and low prices, only now the sugar prices have reached healthy levels, commensurate with the raw material cost,'' Ms Pathy justified.

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