THE STATE government will soon announce a mechanism to investigate the trading of sugar at the NCDEx platform. Both chief minister Devendra Fadnavis and cooperation minister Chandrakant Patil said that while price of sugar on the platform was high, millers have been complaining of no demand – a phenomenon which needs to be investigated.

On January 2, The Indian Express had reported how both prices and volume of sugar on the NCDEx platform had seen a high over the last few days, but on ground level, the millers see no effect on demand (“Sugar prices up but mill owners feel no gain”, The Indian Express January 2).

Records from the market showed that since July 2015 the platform had seen trading of over 35 lakh tonnes of sugar priced at Rs 9,318.41 crore.

Millers and growers had said that in many cases, the sugar traded on the platform was not even physically delivered. Many have also said the trade on the platform could be just speculative in nature. Swabhimani Paksha, MP, had earlier this week submitted a letter to Union Finance Minister Arun Jatiley asking for a thorough investigation in the trading on the market.

Fadnavis, who was speaking at the annual general body meeting of the Pune-based Vasantdada Sugar Institute, said the market forces that are causing volatility needs to be investigated.

“Price volatility is some thing to be taken seriously. Also, many of the traders do not result in physical lifting of the stock, which needs to looked into,” he said.

The chief minister said that although lakhs of tonnes of sugar is traded on the NCDEx platform, not even 25-30 per cent of it is delivered. This he said was a matter of grave concern and has to be investigated in full.

Meanwhile, Patil, speaking on the sidelines, said that the state government will be soon setting up a suitable committee to look into the matter. “In order to form a committee or a commission, we need to have the proper legal framework for it. The matter will be put before the state cabinet, during its next meeting and work will start on that,” he said.

Shetti, on his part, said he has been raising the issue with both the state and central government for the last six years. “I had brought the matter to the notice of Prithviraj Chavan, when he was in the Prime Minister’s Office. But due to intervention of a powerful leader who had vested interest in the matter, it was not looked into,” he said.

The Challenges

The meeting also saw former union agriculture minister Sharad Pawar talking about the challenges before the industry. Pawar, who is also the president of VSI asked millers to speed up exports in order to meet the targets set by the Central government by individual millers.

While the state has a total export quota of around 14 lakh tonnes, just around 2 lakh tonnes have been exported so far. Millers have cited better domestic prices as their reason for preferring domestic markets over export.

Till date around export contracts 3.45 lakh tonnes of sugar has been signed of which 1.45 lakh tonnes has been dispatched.

Fadnavis on his part said the reluctance of millers to export can destabilise the markets again and force the government to intervene.