Millers last week decided to raise prices of the sweetener by four to six per cent in an attempt to trim losses after prices fall below cost of production.
"During the last few moths, whole sale sugar prices were ruling at prices ranges from Rs 2,350-Rs 2,600 per 100 kg, hence the consumers were able to get sugar at around Rs 30 per kg. Now with the sudden increase in ex-factory prices of sugar in the wholesale market will go up to Rs 2,900 to Rs 3,000 and retail prices of sugar will go up by about Rs three per kg," The Bombay Sugar Merchants Association's President, Ashok Jain said here.
The sugar trade is greatly perturbed by the decision of the captains of the sugar industry to fix the minimum floor price for sugar to be sold by all the factories in the state as also the sugar factories in other stages, Jain said.
In effect sugar factories have formed a cartel and have suddenly fixed the minimum prices of sugar at a price, which are higher by Rs 200 per quintal (Rs 2 per kg), he said.
It needs to be appreciated that forming cartel for fixing prices and essential commodity is legally not tenable. In the case of sugar an item of daily consumption for the average consumer the decision is ethically wrong, because it adversely affects every consumer, he said.
Jain appealed the leaders of the sugar industry not to enforce the decision to increase the price hike by cartel which will bring bad name to the sugar industry.
"We urge the industry to reconsider their decision and allow the open market operations to continue as higher to fore," Jain said.
The Association has also appealed the Government to intervene in the matter and allow open market forces to function normally, he said.
India's sugar stocks at the start of the new season in October will rise to 5.9 million tonnes, the Indian Sugar Mills Association said.