| Decontrol of sugar sector is unlikely to happen on 1 October as contemplated earlier, said Sharad Pawar, agriculture minister, on the sidelines of a press conference in New Delhi today.
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| "We had the proposal under consideration but then the sugar release mechanism is working fine and is pretty stable. We feel there is no need to change it, as of now," Pawar told Business Standard.
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| Pawar made it clear that the decontrol of the sector will not be happening when the new sugar year begins on 1 October this year, a long-standing industry demand.
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| On why the government will not be taking the final step, he said, "We need to not only safeguard the interest of the industry but also that of the farmer and the consumer."
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| Decontrol will involve removal of marketing restrictions such as levy and free-sale quota. It will mean doing away with the requirement for mills to deliver 10 per cent of their production to the government as "levy" under the public distribution system.
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| The sector would also be then free of the release mechanism that applied to the remaining 90 per cent "free sale" sugar. The release mechanism regulates the quantum of sugar that mills are allowed to sell in the open market in a particular month.
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| With the decontrol not likely to happen on 1 October, the Sugar Directorate will continue its mechanism to allocate mill-wise free sale quotas.
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| While the government has been committed to decontrol of the sector for over five years now, a decision has been put off time and again following political compulsions.
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| Dhampur Sugar Mills, joint managing director, Gautam Goel said, "There is not going to be any adverse sector in short-to-medium term. Giving an industry perspective, Indian Sugar Mills Association's director general S.L. Jain said, "The control over the industry is not very high and its just 10 per cent of levy."
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| On fluctuations in sugar prices, Pawar said, "The (ex-mill) price should be around Rs 1,650-1,700 a quintal, while the cane price to the farmer between Rs 110 and Rs 115 a quintal. This overall, he said, will ensure that the retail price hovers around Rs 20 a kilogram.
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| On the plantation of the current kharif sugarcane crop, he said that this year's acreage is "quite better" on year.
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| "Sugarcane plantations in Uttar Pradesh, Maharashtra, Tamil Nadu, Karnataka, Andhra Pradesh and Gujarat are seeing an over 30 per cent rise in acreage. In case of standing cane, the quality yield is like be 10-15 per cent higher."
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| Following this, the sugar output next year is likely to be higher than industry's estimate of 180 lakh tonne, he said, while adding that "it will be too early to give an exact estimate as of today, with the can plantation not yet complete".
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| As of today, India is not self-sufficient in the sugar production. In 2004-05, India imported around 16 lakh tonnes of raw sugar to meet its domestic demand while the domestic output stood at 128 lakh tonne.
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Exports likely from 2005-06
It is likely that from sugar year 2005-06 (October-September) onwards, in wake of rise in cane plantation, India may emerge as a sugar exporter.
Agriculture minister Sharad Pawar said, "We have asked two industry agencies— the National Federation of Cooperative Sugar Factories and the Indian Sugar Mills Association--to look into this."
Sugar exports can only happen after meeting the total domestic requirement and maintaining a buffer stock, he added.
With the European Union's subsidised sugar regime coming to an end, the international market next year on is likely to face shortage of white sugar availability.
Following this, sugar prices are likely to rise and may even touch $400-a-tonne level, said S L Jain, director general of Indian Sugar Mills Association. Currently, the London sugar prices are ranging around $330 a tonne.
Despite prices reigning high, Jain said, "This will allow India to export sugar without the need of any subsidy. The industry may only seek transport subsidy, as per the WTO norms as most mills are in hinterland." | |
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