According to Prakash Naiknavare, MD of National Federation of Cooperative Sugar Factories Limited (NFCSF), separate pricing for industrial and domestic users would better reflect changing consumption patterns and improve sugar mill realisations.
Naiknavare also called for greater policy support, including higher sugar and ethanol prices, saying such measures, along with the rollout of flex-fuel vehicles, could strengthen the financial health of sugar mills and support the sector’s long-term growth.
This is an edited transcript of the interview.Q: While the industry is celebrating the launch of flex-fuel vehicles and E85 fuel, there are still concerns around goods and services tax (GST) rationalisation, price revisions and pending dues. How are you looking at these issues? You recently had a meeting with a group of ministers. Could you give us a sense of what was discussed?
A: Let me give a little background. On March 23, more than two-and-a-half months ago, the Maharashtra Chief Minister held a meeting in Mumbai to discuss issues facing the state’s sugar sector.
At that meeting, it was decided that matters requiring intervention from the Government of India should be taken up in Delhi. The Chief Minister offered to lead the delegation. However, state elections and the onion-related issues in Maharashtra delayed the process.
Finally, on May 27, a joint meeting of the sugar and onion sectors was held in Delhi. The meeting lasted nearly one and a half hours.
Union Food Minister Prahlad Joshi, Agriculture Minister Shivraj Singh Chouhan and Union Home Minister Amit Shah were present. Secretaries from the food, agriculture, cooperation and petroleum ministries also attended. On the Maharashtra side, the Chief Minister, both Deputy Chief Ministers, around 12 senior ministers and several senior officials participated.
Q: What were the key issues raised by the sugar industry?
A: The sugar-related issues were discussed in considerable detail.
Among the major issues raised were an upward revision in the sugar MSP and sugar-based ethanol prices, equitable allocation of ethanol opportunities between the sugar and grain industries, rescheduling of outstanding loans, availability of fresh credit, and issues related to Sugar Development Fund (SDF) loans.
We also discussed the OTA scheme. While penal interest has already been waived, the industry requested that at least 50% of the principal interest burden also be addressed.
A new issue that came up was the proposal for dual pricing of sugar — having separate prices for industrial users and domestic consumers.
Another issue discussed was bringing jaggery units with production capacities above 100 tonnes under the Sugarcane Control Order.
All these issues were flagged by industry stakeholders. The Home Minister took note of every point and addressed each issue in his concluding remarks. That was encouraging. He assured us that decisions would be communicated within 10 days.
Q: The 10-day period has already passed. Could you elaborate on the proposal for dual sugar pricing?
A: Almost 60-65% of sugar consumption comes from industrial users. Therefore, industrial buyers are the largest consumers of sugar and currently benefit from the same pricing structure that applies to retail consumers.
Watch the full conversation here
We proposed to create two separate pricing categories — one for industrial use and another for domestic consumption.
Historically, this idea was not seriously considered because of concerns about possible black marketing and misuse of the price differential.
However, given the changing structure of the market and the growing role of industrial consumption, we believe it is time to revisit the concept and examine whether such a framework can work effectively.
Also Read: Mark Zuckerberg says Meta made ‘mistakes’ in AI workforce shift
