News reports in Business Standard today report that the Agriculture Minister will hold a meeting with the Uttar Pradesh sugar manufacturers and representatives of cane growers to end the imp0asse on prices and supply of can.
The mills are ready to begin crushing ops but the farmers are demanding a price of Rs 280 per quinral which the mills are not agreeable to pay. The standoff is affecting everybody concerned as the sugarcane loses its sucrose content if not crushed at the right time. The nation is badly in need of sugar as the demand is far in excess of the production. By the delay it is the farmer also who loses. Political parties have all taken sides with the farmers as they find this as an opportunity to win brownie points.
The political parties fuel such demands as they feel that the mills are earning exorbitant profits with sugar prices ruling at Rs 40 per kg in the wholesale markets.
The faster this issue is resolved will benefit all parties concerned.
The problem does not exist in Maharashtra where the sugar mills have paid a reasonable price to the farmers and have started crushing already.
Sugar companies are therefore politically sensitive stocks and their share prices factor in this element.