Pune: With sugar prices crossing the government’s comfort level of .₹ 40/kg in the wholesale market, the food ministry has expressed its concern to the industry and warned that it will not hesitate to take steps to rein in rates.

“The government at the highest level is concerned about the sudden increase in sugar prices over the past 8 to 10 days,” the food ministry informed the sugar industry. The industry should not be under the notion that the government cannot intervene due to elections in certain states, the government said. “The government thinks that the recent increase in sugar prices is unnecessary and is more due to speculation,” sta- ted a letter issued by the Indian Sugar Mills Association (Isma) to its members. Isma has cautioned members not to get caught in the speculation in the market and to be “patient and reasonable”. T Sarita Reddy, president of Isma, said that though sugar prices have gone up, the cost of production has also increased drastically.

However, Reddy said, “If the government decides to import sugar, it will send prices crashing down and cane payment to farmers will suffer.” NCDEX has already increased special cash margin on buyers by 20% to 45%. A 5% additional margin already exists taking the total to 50%. Along with an initial margin of 5% the total margin to trade is 55%.