Supremacy of sugar millers intact

Time and again, the mill owners have conflicted with the sugarcane growers just when the crushing season is due to start. But now the cane growers have also joined the band of manipulators, with the audience being the common man.
With the expiry of Supreme Courts order regarding the sale of sugar at Rs40 per kilogram, growers are now demanding Rs150 - Rs200 per maund for their stock - a move that has pushed the millers on the receiving end of the bargain and are now raising hue and cry over it. The standing sugarcane crop has started reducing its weight with an increase in the sucrose content, which is why the cane growers are now asking for higher prices. Naturally, none of the mill owners is willing to buy cane at this price; leaving most of the mills either idle or running at merely 20 to 30 percent of their capacity.
Historically, when sugar was being sold at Rs30 per kg, the cost of cane was around Rs2 per kg. Despite the fact that government has already announced cane support price of Rs102 per maund, cane is still costing around Rs200 per maund. Hence, at this price of cane, sugar production will cost the millers around Rs55 per kg.
A closer examination reveals that the crisis is a result of inefficient governance at various stages in the cycle, which would push retail prices of the sweetener to at least Rs 75-80/kg, unless growers do away with their demands.
Unfortunately, there is no good news in the dynamics of sugarcane cost as it is not expected to decline in the future due to ever-increasing cost of major inputs such as water and fertilizer nutrients.
What appeared to be a breather for the masses in the form of Supreme Court intervention has evaporated with the lapse of the popular order. But now by the look of things, there is enough room for the sugar price to be manipulated by the entire chain - from the growers to the millers. And its not as if there is no viable solution to the menace, the dire situation demands more direct government intervention either in form of stringent regulations or acting as the sole cane buyer from the growers. This would remove the intermediaries from the supply chain and won give any room to the millers to complain about being charged prices over and above the one officially announced by the government.