As the festival season sets in, the rising prices of sugar, which has more than doubled this year, has created a headache for the government.

With three Assembly elections — Maharashtra, Haryana and Arunachal Pradesh — scheduled in the middle of the festive season, this rise in prices has given ammunition to opposition parties. Even within the government, a section of the ruling Congress has mounted an offensive against NCP chief and Agriculture and Food Minister Sharad Pawar.

The government’s efforts to ramp up the availability of sugar in the retail market and ease prices by imposing stock limits under the Essential Commodities Act and allowing duty-free import of raw and refined sugar has also not yielded desired results.

What is also worrying is that the country is now a net importer of the commodity in 2008-09 sugar season (ending September 30) from having been a net exporter in the previous year. In fact, after having produced over 28 million tonnes of sugar in 2006-07, and over 26 million tonnes in 2007-08, the government had decided to create buffer stock of 50 lakh tonnes and give incentive for export of sugar for almost one-and-a-half years to help the sugar industry which was facing a situation of very high stocks and, thus, low prices. The country exported about six million tonnes of sugar in this period.

Even the domestic stocks of sugar at the beginning of the sugar season (October 1), which is pegged at about 2.6 million tonnes as against the opening stock of over 8 million tonnes last year, is running at its lowest since 1994-95. On top of it, sugar production this year is estimated to be somewhere around 15 million tonnes as against the demand of about 23 million tonnes.

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