Mawana Sugars, along with other sugar stocks, is buzzing in the bourses as the sweetener becomes costlier in some parts of the country. Sugar prices have been hovering at ₹42-47 per kilogram in some regions.

Speaking to BTVi, Siddharth Shriram, Managing Director of Mawana Sugars, says the present price rise was due to induced shortage of sugar.

Also, the Centre is trying to drive down the price of sugar by imposing stock holding limits. Sugar millers should be sensible in selling their output rather than being unrealistic in trying to get the last buck, he warned. Excerpts:

Retail prices of sugars have been on an uptrend. Can you take us through the reasons?

The rise in prices originally happened because of the induced shortage of sugar. The Centre is concerned that all the sugar mills were under water. Sugarcane prices are higher than sugar prices. So, they allowed export of sugar.

Also, there was a drought in Maharashtra. For 10 days, there was shortage of sugar production in the year that is presently underway. So sentiments changed and the prices moved up to ₹35,000 per tonne in North India and somewhat less in the West.

But that situation is going to be short-lived because there are elections in UP and Punjab. The Centre is going to keep inflation under complete check by not allowing wholesale prices to go higher than maximum ₹36,500.

Second, there is a perceived huge profit for sugar millsin the near future. So there is a huge contest for sugarcane in UP particularly, and that is already been taken note by the State government. Chances are the government will, prior to the season, increase the sugarcane rate so high that we will once again be in the same mess that we were in the last 3-4 years.

In Maharashtra, the drought is also over. While we may be having one year of reasonable profit, the future is looking rather grim based on the canvassing for additional cane supplies for individual factories in UP.

We have already entered the festive season. How do you see the demand panning out throughout the season? And, what is the kind of impact that we can expect in terms of the prices are concerned?

Now that the festive season has begun and demand for sugar has started coming in, there is an uptick in prices. But how far the Centre will allow that to go is a complete suspect because when bad news comes out of the prices, it reflects in inflation, and inflation affects election prospects. In the past, when the price of sugar had gone up to near ₹40, the government had come down so heavily that the price of sugar dropped down to under ₹32. I think sugar millers should be sensible in selling their output rather than being unrealistic in trying to get the last buck.

The Centre has introduced measures like sugar holding quota; set at 37 per cent. What is your take on a measure like this?

The Centre is trying to drive down the price of sugar because the stock holding limitation means that you have to sell your sugar. Prices of many commodities go up on expectations.

So, by putting those limits, the Centre is trying to reduce the impact of expectations and speculations. If the prices go up again, they will hammer down even more. The government has good number of levers to control sugar prices. The last and worst of them is to control the prices.

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