India’s 2011-12 sugar output can rise to 25 million tonnes: Food minister

“We stick to our initial production estimate of 24.7 million tonnes. But the output can go up a little to 25 million tonnes,” food minister KV Thomas told reporters after meeting agriculture minister Sharad Pawar

New Delhi: Food minister KV Thomas today said the country’s sugar production could increase to 25 million tonnes in the 2011-12 marketing season (October-September), brightening the export prospects of the sweetener, reports PTI.

“We stick to our initial production estimate of 24.7 million tonnes. But the output can go up a little to 25 million tonnes,” Mr Thomas told reporters after meeting agriculture minister Sharad Pawar here.

India’s sugar production stood at 24.3 million tonnes (MT) in the 2010-11 marketing year.

“On the basis of production, we will soon work out a scheme so that some quantity can be exported,” Mr Thomas said.

The food ministry will work out the modalities for exports in the current year and will take up the proposal in the next Empowered Group of Ministers (EGoM) meeting, he added.

Mr Thomas also said that sugar exports would be allowed in tranches.

In the 2010-11 marketing year, the government had allowed the export of 2.6 MT of sugar.

On stock-holding limits for the sweetener, the minister said, “We will lift the stock-holding limit on sugar and rice.”

In the last EGOM, the stock-holding limit on these two items was extended for two months till November.


Normal production levels at Manesar only by Dec-end: Maruti

Maruti Suzuki is in the process of ramping up output at the Manesar unit following a tripartite agreement between the management, workers and Haryana government to end a 14-day strike on 21st October. However, production is expected to reach normal levels only by the end of December this year, a company spokesperson said

New Delhi: Hit by repeated incidents of labour unrest, Maruti Suzuki India (MSI) expects car production at its Manesar plant to reach normal levels only by the end of December this year, reports PTI.

Speaking to analysts today, a MSI spokesperson said the company was ramping up output at the Manesar unit following a tripartite agreement between the management, workers and Haryana government to end a 14-day strike on 21st October.

“The situation at Manesar is normal... By the end of this quarter, we will reach the normal level of production at the plant,” the official said.

The Manesar plant was rolling about 1,200 cars every day before the first strike hit in June. The unit produces Maruti Suzuki’s Swift, A-Star and SX4 models.

The 14-day-long strike at the plant, causing an estimated over Rs700 crore loss, was called off following a tripartite agreement that reinstated 64 dismissed permanent workers and took back 1,200 casual workers. However, 30 permanent workers remain suspended.

“Lots of initiatives were taken while reaching the agreement, which is targeted for a long-term solution. The atmosphere was positive and constructive when it was signed,” the spokesperson said.

As per the agreement, a ‘Grievance Redressal Committee’ and a ‘Labour Welfare Committee’ would be set up.

Talking about work practices at the Manesar plant, the official said: “Fundamentally, there is nothing wrong in the practices, as the same have been there in Gurgaon for the last 30 years. Probably there was some misunderstanding and miscommunication... We could have done a better job there.”

Earlier, in June, workers at the Manesar plant went on a 13-day strike demanding the recognition of a new labour body, Maruti Suzuki Employees Union. The stir had resulted in a production loss of 12,600 cars, valued at about Rs630 crore.

From 29th August, the company again witnessed a 33-day standoff when the management prevented workers from entering the plant without signing a ‘good conduct bond’.

Talking about sales, MSI managing executive officer (marketing and sales) Mayank Pareek said sales in October will be low due to the labour unrest.

In addition, rising interest rates and high fuel prices are affecting consumers’ decisions to purchasing cars.

To push its sales, the company offered heavy discounts in the last quarter. The average discount during the July-September period increased to Rs13,500 per car from Rs9,500 per car, MSI chief financial officer Ajay Seth said.

On production capacities, Mr Pareek said MSI was hiking the output of its compact car Swift to 16,000-17,000 units per month from the existing 10,000-12,000 units a month.

MSI is also ramping up the production capacity of its sedan DZiRE to 10,000-11,000 units a month from 7,000-8,000 units.

When asked about demand for diesel cars, Mr Pareek said the industry has witnessed demand for diesel cars rising by 24% in the last six months, while the same for petrol cars has fallen by 11%.

Last week, MSI posted a 59.81% fall in net profit to Rs240.44 crore for the quarter ended 30th September, mainly due to production losses at Manesar because of the labour unrest and foreign exchange losses.

Total income from operations during the quarter under review also declined by 14.38% to Rs7,831.62 crore.

Mr Seth said the company suffered an impact of about Rs100 crore due to forex losses.

“We were under cover for the second quarter as we had hedged our yen exposure, but we are not hedged beyond 30th October. Fortunately, yen is correcting now. So we may not have much impact in coming quarters,” he added.

The company’s board, meanwhile, has approved the purchase of up to 1,500 acres of land in Gujarat to set up manufacturing facilities.


Paying high prices for onion, garlic? Blame it on the retailer

Despite adequate production, prices had soared mainly on festive demand. But benefits of adequate production, lowered wholesale rates and dip in exports are not being passed on to the customer

If rising interest rates are not enough to spoil your party, soaring prices of essential commodities, mainly onion and garlic, will surely make you cry. Surprisingly, the production of both commodities has been good and prices have come down in the wholesale market. But the prices remain high for the ordinary consumer because of retailers who charge high prices (citing issues like ‘increase in demand amidst festivities’ and ‘general price rise situation’.)

The price of onion is in the range of Rs20 per kg in Mumbai, while the price of garlic has doubled since two months, to Rs100-150/kg (depending on the quality). While in the wholesale market the prices of onions are at Rs10kg-Rs12/kg and garlic in the range of Rs40-Rs85/kg.

Analysts confirm that farmers are selling their stored produce at a price less than production cost because of the adequate production of this year and arrival of the new crop in the market. Even exports have been low, which has added to the current availability.

RP Gupta, director, National Horticultural Research and Development Foundation (NHRDF) told Moneylife, “Stored onion was supplied in the market in addition to fresh production that arrived in the market. The wholesale prices are in the range of Rs800-Rs900 per quintal in Lasalgaon market. Those who stored the crop in anticipation of a price rise are now selling in the market at lower price. Farmers are forced to sell lower than production cost due to general price rise.”

He added, “Nobody has control over the retail market, so consumers pay the price of whatever is being charged.”

Shashi Panikar, professor of economics at the University of Mumbai says, “There is a political class which is hand-in-glove with the middlemen and traders. The farmers can’t even get their basic production prices, while consumer continues to pay at a higher price. It was reported that there is a bumper crop, still the prices are unbelievable. Unless this political nexus is broken, people will keep paying higher price.”

The prices of garlic have also doubled since September. According to NHRDF, the modal price of garlic at the start of September was Rs4,000 per quintal in Mumbai. It has now increased up to Rs9,000 per quintal as on 27th October.

“As per our projection, the expected production of garlic is good. There could be plenty of supply,” added Mr Gupta.

Rajendra Bhatka, a trader at APMC, Vashi (Navi Mumbai) said, “There is an increase in demand. So the prices have climbed up. There has been export of garlic to countries like Sri Lanka and Bangladesh.”  

“I recently bought garlic at Rs120/kg—at the same time there are reports of bumper harvest of most of the crops. Such short-term prices are common during festival time. I don’t mind paying extra to farmers but not the retailers who charge over and above famers’ margin,” said Nilima Jadhav, who runs a food-service business.

However, wholesale prices are expected to remain stable. “At least for the near-term, the current price level will prevail. Nothing can be said about the prices in the retail market,” said another trader from Mumbai.



Vikas Gupta

5 years ago

The right idea is to break this Political Nexus by bringing the Farmers directly accessible to consumers. Can somebody use RTI in this context to break this Nexus? Can somebody ask Mr. Sharad Pawar about this?

Anil Agashe

5 years ago

This is a know thing. In Pune I have observed that retail prices can be 100 to 200% higher than that of wholesale market depending upon locality. It is because there are people who buy irrespective of prices, me included. There is no control on profiteering by retailers. The food inflation is therefore partially at least man made and retailers as a class have benefited because of this. I have always believed that inflation has made some people happy and rich! High time we improved supply chain in food and give direct access to farmers to consumers.

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