Maharashtra bats for sugar decontrol

Amid volatility in sugar prices in both domestic and global makets, Maharashtra today made a strong pitch for the decontrol of the sugar industry — on a priority basis. The government also called for the discontinuation of the Centre’s levy sugar regime and release mechanism.

State chief minister Prithviraj Chavan said on Monday that decontrol would enable the sugar industry to take decisions based on market conditions. Crucially, he chose the occasion of the 55th annual general meeting of the Federation of Cooperative Sugar Factories in Maharashtra, a representative body of over 200 mills, to make the government’s pro-decontrol argument.

“I am aware that the sugar industry is passing through a difficult times. The prices in the global market have fallen to around $603-608 per ton and mills are finding it difficult to export,” the chief minister noted. Similarly, the prices have been volatile in the domestic prices, currently standing at Rs 2,700 per quintal. Future trading, too, is witnessing a similar trend.

“Therefore, the centre needs to consider decontrolling the sugar industry,” Chavan said. “It will help mills take decisions as per prevailing market conditions. It will also make them more professional, efficient and competitive in their functioning.”

Further, Chavan also made a strong case for the removal of levy mechanism. Currently, the sugar mills have to allocate 10 per cent of their production for levy, which is for the public distribution purpose.

The rest is a non-levy, meant for open market sale. “The centre can consider the purchase of sugar from the open market and allocate it for public distribution by removing the levy sugar regime. The state government supports industry’s view for the removal of levy sugar,” he added.

On the discontinuation of the release mechanism, Chavan said it was necessary in the “larger interest” of the industry, especially when the market was volatile. “In the case of Maharashtra, this month’s quota released by the central government has been substantially higher compared to the last year,” he revealed. “It is difficult for the mills to sell it within the stipulated time when the prices are falling.”

At the function, Chavan soon found his views being seconded by union agriculture minister Sharad Pawar and Federation of Cooperative Sugar Factories in Maharashtra chairman Vijay-sinh Mohite-Patil.