Sugar industry seeks lifting of bulk users' stock limit

NEW DELHI: The sugar industry on Wednesday said that the government's decision to relax the stock limit on bulk users will not help increase demand for the sweetener significantly, and sought the complete removal of restrictions placed on it.

"There is no level playing field for mills as there is no stock limit on imported sugar," Indian Sugar Mills Association deputy director general, Mr M N Rao said, adding "The stock-holding limit is encouraging bulk consumers to depend on imports."

Last week, the Centre had eased the stock limit norm on bulk consumers, such as manufacturers of ice cream and biscuits, by allowing them to keep sugar for 15 days instead of 10. The stockholding limit was imposed in August 2009 to curb demand for domest ic sugar and arrest rising prices.

Echoing a similar view, National Federation of Cooperative Sugar Factories (NFCSF) managing director, Mr Vinay Kumar, said, "Obviously, there is no level playing field. At present, bulk users are not buying sugar from mills."

Both ISMA and NFCSF demanded that the stock holding limit on bulk users be removed completely to boost demand and arrest the downward trend of sugar prices.

Sugar prices, which have declined by about 30 per cent in the last four months, currently costs Rs 32-33 a kg in the national market. In mid January, the prices had touched nearly Rs 50 a kg in New Delhi.

Besides the demand for stock limit removal, the industry is also seeking the imposition of duty on white sugar. Duty free sugar import will continue till December 2010.

source: thehindubusinessline