New Delhi:
Sugar prices have seen a steady rise since the second half of last year. Taking the sweetness away from the commodity, packaged sugar now costs at Rs 44 a kilogram in the retail market and is moving towards Rs 50 a kilogram mark.
"'The selling price of tea is the same, but the cost (that includes sugar) has gone up. At this rate, my business will shut down," said Harinder Singh, a tea stall owner.
''Even a cup of tea has become unaffordable. The government must intervene,'' said Rita, a housewife.
Wholesale sugar prices in the national capital on Thursday scaled a new peak of Rs 4,450 a quintal on supply concerns after the government allocated less sweetener for sale this month.
Traders say the spiraling sugar prices may hit new highs due to rising demand for the ongoing marriage season.
"The gap between demand and supply is widening, raising fears of more hike in sugar prices in the retail markets during the marriage season," said Delhi-based sugar merchant Sushil Garg.
Traders have blamed the current upward spiral in sugar prices to "low" release of sugar, even though the Food Ministry has said 14.30 lakh tonnes of the sweetener allocated by it for open market sale by mills in January is "sufficient to meet the internal demand for the month".
Prices of sugar (ready medium) and second grade jumped up by up to Rs 150 to Rs 4,350-4,450 and Rs 4,340-4,440 per quintal, respectively.
The surge in the prices already drove retail sugar prices to Rs 44 per kg from Rs 35.90 in the retail markets in the past 15 days, said a dealer at Baburam Ramkishan and Sons in the national capital.
Reports of the sweetener becoming more expensive in international markets are also to be blamed for the current rally here, Garg said.
In the last one week, white sugar prices have surged by USD 20-25 a tonne in global markets, which works out to a landed cost of USD 800 (Rs 36,664) a tonne in India, Indian Sugar Mills Association Deputy Director General M N Rao said.
India is estimated to produce 16 million tonnes of sugar in the 2009-10 season, ending September, while it needs 23 million tonnes for its annual consumption. The gap is to be bridged through imports.
Sugar futures in New York is doubled last year as adverse weather damaged crops in Brazil and India, the largest producers. India is buying sugar for a second year after the weakest monsoon since 1972 worsened a supply deficit.
However, the silver lining is that with this sort of prices, there will be a lot of shift of acreage to sugarcane, traders said.
Raw-sugar futures for the March delivery gained 0.1 per cent to 27.64 cents a pound in New York. Earlier, the most-active contract touched 28.9 cents, the highest price since January 27, 1981.
Following are Thursday's rates in Rs per quintal: Sugar ready M-30 4,350-4,450 and S-30 4,340-4,440 Mill delivery M-30 4,250-4,350 and S-30 4,240-4,340.
Sugar mill gate prices (excluding duty): Kinonni 4,200,asmoli 4,100, mawana 4,170, titabi 4,120,Thanabhavan 4,090, Budhana 4,100, Dorala 4,180.
The government seems helpless in controlling the spiralling prices. Many fear that sugar prices may cross Rs 50 a kg in the coming days making a cup of tea bitter for the consumers. (With PTI inputs)