Maharashtra chief minister Devendra Fadnavis' statement about initiating a probe into future trading of sugar at National Commodity & Derivatives Exchange limited (NCDEX) has not gone down well among the sugar mill owners.

Mill owners have strongly opposed the possible move suggested by the CM last week. Moreover, they have also alleged that the government is bowing down to pressure of hedge marketeers (traders of future markets) of the NCDEX which is a 12-year-old online agri-commodity exchange spot based in Mumbai.

"The Fadnavis' statement is suspicious. He didn't initiate probe when sugar prices were as low as Rs19 per kg and farmers were incurring huge losses so as mills. But when the sugar prices have crossed Rs32 per kg and farmers started getting benefit, the government wants to probe the role of NCDEX. This shows their anti-farmer stand," alleged Vinay Kore, chief of Jan Surajya Shakti and president of Warna sugar mill, Sangli strongly opposing the inquiry into NCDEX.

Kore also alleged that that the government has bowed down to pressure of some future traders who earlier speculated lower price of sugar but are unable to get it at the same price. "I know those future traders who had incurred losses due to speculative feature but disclosing them would be inappropriate, claims Kore.

He also alleged that since Fadnavis' announcement of probe, the sugar prices have came down from Rs3,245 per quintal to Rs3,095 per quintal at the NCDEX within three days.

Praful Vithalani, president Jagjiva Keshavji, a sugar trading company based in Mumbai, also criticised the move. "The CM has wrongly blamed sugar traders for the mess."

Mounting pressure on the sugar mills to export sugar, Fadnavis had last week warned mills of action like collecting sugar from them at regulated prices for public distribution system (PDS). "If exports do not take place despite subsidy on export, we may have to think about taking sugar from mills at regulated price as a mandatory measure for distributing through the PDS," Fadnavis had said while speaking at the annual general body meeting of the Vasantdada Sugar Institute (VSI), Pune last week.

Price volatility in sugar is a matter of concern for the government. Lakhs of tonnes of sugar is being traded on the NCDEX. But actual physical delivery is hardly 25% to 30%. This leads to price volatility and the sugar mills have to bear with its adverse consequences, say government sources.

"We need to see which market forces are responsible for this. These forces, who first take the prices up and then pull them down, need to be controlled," the CM had said.

Kore said, "Had the government been serious about farmers, it would have first initiated the probe into pulse trading not the sugar trading."

A year and half ago, Maharashtra government has also moved to NCDEX from controlled-price model to purchase sugar for public distribution system. However, the department officials are tight lipped over the issue. "We are just using the NCDEX platform to buy the cost-effective sugar. We don't experience any problem in doing so. Last month we purchased sugar at Rs29 per kg for three crore PDS beneficiaries. The department has no way concerned with the allegation or probe," said a highly placed official from the department.

LOP has complained, Agri secretary looking into this: CM

When asked about reasons of probing NCDEX, Fadnavis said, "A complaint in this regard has been submitted by the leader of opposition Radhakrishna Vikhe Patil. I have asked the secretary agriculture to look into this." He didn't comment on Kore's allegation of being anti-farmer though.