In both cases, there is political pressure, and also perhaps some economic rationale, to sharply raise prices. Today’s realisations are just above what they were in October 2012 and at these levels, some increase in SAP should be possible,” said Abinash Verma, director-general, Indian Sugar Mills Association (ISMA). The Centre has, for now, been quite hawkish with respect to sugar prices. That being the case, it makes no economic sense to artificially suppress sugar prices, what is what the Centre is doing at present. Nor does it make any political sense to have a build-up of cane payment arrears during January-February, just when voting in UP is underway.

Source: Indian Express September 07, 2016 21:45 UTC