Given a choice to consume either sugar or wheat for a certain time period, most would prefer the latter, being a staple diet fairly easy to process and store. The worrisome fact, however, is that both commodities could be scarce next year.
Several years into the food maladministration problem, cane-crushing crisis is deepening every passing day with all the successive governments failing to ensure that sugar millers time their crushing according to the Sugar Factories Control Act. This year is a similar story.
Ideally, wheat is supposed to be sown between October-November, ie right after sugarcane crop is harvested for crushing. This timely sowing of wheat results in optimal crop; while timely lifting of sugarcane ensures that farmers get the right price for their crop.
Despite governments announcement to begin crushing, powerful sugar mills owners have threatened to delay crushing by two months to January 2010. This delay, in effect, would not just result in huge financial losses to the growers but also create a shortage of both wheat and sugar going forward, triggering another upward price spiral.
But this years case is even more testing. With 35 percent water shortfall likely in the upcoming crop year, growers can either use that limited quantum of water to keep sugarcane crop from drying or to plant and nourish wheat. If they don water the ready-to-harvest sugarcane crop, 25 percent of the sugarcane will dry up - leading to a sugar shortfall.
But if they do, there will be little water left for next seasons wheat, which will create another bout of food crises. So whats behind the delay? Apparently, its the millers refusal to sell sugar at Rs 40 per kilogram. A more plausible reason could be that, postponing sugarcane crushing benefits the millers.
This is because delays lead to a reduction in sugarcanes weight and increase its sucrose content, which means higher sugar per kilo of sugarcane - generating higher margin for millers. But this also means that the crop would start rotting because of increasing level of sucrose - forcing farmers to sell off their crops at discounted prices. Hence, millers would be getting cheap sugarcane and growers will be taking a huge hit on their margins.