Govt may allow mills to sell imported raw sugar to other mills

The Centre is believed to have decided to allow selling of imported raw sugar lying at ports by one mill to another, a step to quicken the processing of the sweetener and augment domestic supply.

The decision was arrived at a meeting today called by Prime Minister Manmohan Singh and attended by Food and Agriculture Minister Sharad Pawar and representatives from the industry, a source close to the development said.

Nearly nine lakh tonnes of raw sugar imported by millers are lying idle at ports after Uttar Pradesh government banned the processing till the end of crushing season (March) after farmers' protest over cane pricing.

"In addition to the issue of processing imported raw sugar, the overall price situation in sugar was discussed," the source said, adding that it was agreed that "outright sale of the imported sugar" should be allowed. The Food Ministry will issue the necessary the notification, he noted.

Earlier this month, the Cabinet Committee on Prices (CCP) had allowed millers in Uttar Pradesh to process imported raw sugar in other states following the ban imposed by the state.

However, the processing is yet to start as Uttar Pradesh millers and Maharashtra mills have disagreement over processing charges.

While Uttar Pradesh mills want to pay not more than Rs 4,000 a tonne, mills in Maharashtra and Gujarat are asking for about Rs 6,000 a tonne.

Sugar prices have more than doubled since January 2009 and is currently being sold at about Rs 45 a kg in the retail market of the National Capital.