The rise in price of sugar over the last few days has sparked concern among the food-product manufacturing and the hotel industry with Mysuru Chamber of Commerce and Industry (MCCI) urging the Centre and State governments to immediately intervene and take steps to provide sugar at a subsidised price.

MCCI president K.B. Lingaraju, in a statement here, pointed out that the sharp rise in the price of sugar was severely affecting the food-product manufacturing as well as hotel industry.

The increase in sugar prices is affecting not only the domestic consumers, but also the production costs of bakeries, sweet manufacturers, biscuit manufacturers, beverage companies, food-processing units, hotels, restaurants, and other small and medium scale industries, he said.

The industries are already under pressure due to rising electricity costs, labour expenses, transportation charges, packaging costs, and prices of various raw materials. 

“With the price of sugar rising so rapidly, small and medium-scale food-product industries are being forced to consider increasing the prices of their products. If prices are increased, the burden on consumers will rise; if prices are not increased, the industries will incur losses,” he said.

Urging the Centre and State governments to intervene in the matter, Mr. Lingaraju said the governments should establish a system for supplying sugar at subsidised rates to food-product manufacturing industries and the hotel industry.

“Provide the sugar required by small and medium-scale industries at concessional rates through a government-regulated mechanism”, he said while urging the government to closely monitor sugar stocks, production, and the quantity of sugarcane/sugar being diverted for ethanol production.

While seeking stringent action to prevent artificial shortages and illegal hoarding in the market, Mr. Lingaraju urged the governments to hold consultations with sugar factories and industry associations to stabilise sugar prices.

“Food-product manufacturing industries and the hotel industry are sectors directly connected with the daily lives of the people. It is becoming increasingly difficult to operate these businesses when the price of an essential raw material like sugar rises so sharply within such a short period”, he said while pointing out that the government must understand the difficulties faced by industries and immediately introduce a system for supplying sugar at subsidised rates. 

“Otherwise, rising production costs will ultimately be passed on to consumers,” said Mr. Lingaraju.

Reasons for price rise

While one of the major reasons for the increase in sugar prices is the decline in sugarcane production due to inadequate rainfall, the MCCI president said another significant factor is the increasing use of sugarcane-based products for ethanol production in the country. 

“In view of the Central government’s policy of increasing the proportion of ethanol blending in petrol, larger quantities of sugarcane and sugar-based products are being diverted towards ethanol production, thereby putting pressure on the availability of sugar in the domestic market,” he said.