- Influence of international market
- Brazil benefits from mechanization
- Need of new businesses for sugar industry
Union Minister for Roads and Transport and Highways Nitin Gadkari said on Tuesday that prices of agricultural products, including sugar, are now being determined mainly on the basis of global demand and supply. Also, in the current state of the financial economy, the role of the government is limited to fixing their prices.
Gadkari's remarks at an event organized by the National Federation of Co-operative Sugar Factories Limited (NFCSF) came at a time when various state ministers and industry representatives are demanding an increase in the minimum base price of sugar. At present, the retail price of sugar in the local market has reached Rs.
Influence of international market
Gadkari further said that in the era of globalization, the influence of the international market on the prices of agricultural products has increased. Sugar prices are particularly affected by production and supply flows in major producing countries such as Brazil. Similarly, he explained that the prices of other agricultural products are also changing according to the conditions of major producing countries in the world market.
Now we are part of the global economy. In such a situation no government can fix the prices of agricultural produce, even if the government wants to do so. Gadkari said that due to actual conditions, it is often difficult to implement administratively fixed price demands.
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Brazil benefits from mechanization
Mentioning the competitive challenges facing India, Gadkari said that Brazil enjoys the advantage of highly mechanized agriculture, keeping production costs relatively low. The cost of sugar production in Brazil is around Rs 23 per kg, while in India it is around Rs 33 to 34 per kg. He explained that if there is an additional production of sugar in Brazil, it is putting pressure on the global market as well as the Indian market.
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Need of new businesses for sugar industry
Talking about the future of the sugar industry, Gadkari said that relying solely on sugar production is no longer a viable strategy. He advised sugar mills and industrial sector to focus more on utilization of biomass, straw products, organic fertilizers and other value added products.
Such products can generate additional sources of income for both sugar mills and farmers and provide long-term stability to the industry, he said.