Karnataka Seeks Higher Sugarcane Price From Centre

Shivakumar said the Karnataka government would cooperate fully with a central committee set up on Oct. 14 under former NITI Aayog member Ramesh Chand to examine the demands of cane growers and sugar-sector issues. But he argued that farmers need an immediate assurance, not just a review process. He said decisions on the five key demands should be taken while the committee continues its work, warning that any delay would prolong the disruption in this year’s crushing season.

For investors, the issue goes well beyond rural politics. Sugar mills and integrated agri-business companies depend on the gap between cane purchase costs, sugar realization and policy rules on blending, exports and pricing. A higher cane price would aid growers but squeeze mill profitability unless offset by better sugar prices or policy support. That trade-off is especially relevant for listed companies with exposure to Karnataka and nearby cane belts, where raw material costs can move sharply with government intervention.

The market backdrop is already fragile. Shares of E.I.D. Parry have fallen to 627.5 rupees from 1,051.1 rupees in mid-November, while technical indicators show the stock trading below both its 50-day and 200-day moving averages, with the RSI still weak and the MACD negative. Balrampur Chini has also retreated from recent highs, though it remains above its long-term average. The broader message is that investors are wary of policy risk and margin pressure even before any formal change in cane pricing.

Shivakumar’s push also reflects a familiar political calculus: the state wants the Centre to shoulder the burden of a contentious farm-price decision so it can persuade growers to stand down. A swift announcement from Modi would help Karnataka restart crushing without a prolonged standoff. For sugar companies, the next catalyst is whether the Centre treats this as a committee-led consultation or as an urgent pricing decision with immediate economic consequences.