Sugar, crop prices now hinge on global market, says Gadkari

Union Minister for Road Transport and Highways Nitin Gadkari said on Tuesday that prices of agricultural commodities, including sugar, are now largely determined by global demand and supply. He said the government's role in fixing these prices has become limited.

Gadkari was speaking at an event organised by the National Federation of Cooperative Sugar Factories Limited (NFCSF). Ministers from various states and industry representatives at the event were demanding an increase in the minimum support price for sugar. In the local market, retail sugar prices have reportedly touched Rs 70 per kg amid reduced supply.

Gadkari further noted that in this phase of globalisation, the influence of international markets on farm produce prices has grown significantly. He said sugar prices in particular are directly affected by production and supply conditions in major producing countries such as Brazil. He explained that prices of other agricultural commodities also fluctuate based on conditions in the leading producer countries in the global market.

"We are now part of the global economy. In such a situation, no government can fix the prices of agricultural produce, even if it wants to," Gadkari said. He added that ground realities often make it difficult to implement prices set through administrative means.

Speaking on the competitive challenges facing India, Gadkari said Brazil benefits from large-scale mechanised farming, which keeps its production costs relatively low. He said the cost of sugar production in Brazil is around Rs 23 per kg, compared to around Rs 33 to 34 per kg in India. He explained that when Brazil produces a surplus of sugar, it puts pressure on both the global market and the Indian market.

On the future of the sugar industry, Gadkari said relying solely on sugar production is no longer a viable strategy. He advised sugar mills and the industry to focus more on the use of biomass, crop residue-based products, organic fertiliser and other value-added products.

He said such products could provide additional sources of income for both sugar mills and farmers, and give the industry long-term stability.