Subsidy rollback pushes sugar prices by Rs 14/kg in Kerala

Written by M Sarita Varma | Thiruvananthapuram | Updated: Feb 6 2010, 04:48am hrs
Kerala governments recent decision to stop Rs 28-crore subsidy to its grocery retailing arm Supplyco has pushed sugar prices by around Rs 14 per kg in Supplycos outfits.

Though, sugar prices in state-run shops is still lower than the open market price of around Rs 45 per kg or even Nafed-fixed price of Rs 41 per kg, but low stocks have minimised the benefit of low prices. According to reports, after Karnataka and Maharashtra , Kerala is countrys biggest per capita sugar consumer. Kerala depends on the cane crop in Tamil Nadu and Karnataka for its sugar supplies, but low output in the producing states has impacted sugar availability in the state.

Only a good harvest in the coming April season could bring down sugar prices in the state, C Bineesh, a wholesaler said.

In the states open markets, sugar prices have risen from Rs 35 per kg in December to Rs 42 per kg this month.

According to Kerala food minister, C Divakaran, Centres delay in expediting import clearance to the states grocery arms and inadequate storage facilities has further compounded the problem. Supplyco has got feelers from trading agencies in Brazil to import sugar, but the clearances are not yet in place.

We would need support of the Central government support of these too, Divakaran said.