Indian sugar industry demands end of levy quotas, open market sales of sugar

Indian Sugar Mills Association (ISMA), the apex organization of the sugar factories in the country, has demanded open market sales of sugar as well as opposed the government’s plan for rising levy quota of sugar.
The industry clearly stated that the sugar industry in the country is not in the favor of any restriction on open market sale of sugar.

Indian Sugar Mills Association President Mr. Samir Somaiya along with other representatives of private and cooperative sugar sector met Food and Agriculture Minister Mr. Sharad Pawar yesterday.

Mr. Somaiya said “The government told us about its concern on sugar availability during festive season, particularly in Diwali (festival of lights). We told that the policy should be such that the sugar production in future must meet the domestic demand.”

“The government is mulling to raise the levy quota as demand for sugar in Public Distribution System has increased. Under the levy quota system, all sugar mills are mandated to contribute 10% of their production to the government at a rate fixed by the government. Mills complain that the levy sugar price is less than the cost of production. Levy sugar is distributed through ration shops at cheaper rates”.

The government has proposed three alternatives by hiking the levy quota to 20% or 23% or 25%. Currently, the main restriction on open market sale of sugar is the release order mechanism, by which the government allocates the quantity for each mill every month”.

Shivajirao Patil, Former President of National Federation of Cooperative Sugar Factories, who also participated in the discussion, said, “The important aspect is the policy about non-levy sugar”.

“Whatever be the increase in levy quota, it depends on what is to be the policy regarding the remaining sugar. For the remaining sugar the prices should be such that they compensate the losses in levy sugar. Besides, any change that happens go with increased levy prices,” Patil said.

“Cooperatives are ready to help the government in contributing more sugar under levy quota as the sector has also received help in times of need,” Mr. Patil added.

SOURCE: foodbizdaily