Govt approves Rs 4 a kg rise in levy sugar price

The government has approved the increase in provisional levy on sugar prices for the ongoing October-September sugar season, raising it by around Rs 4 a kg from the last season’s average provisional price of Rs 13.06, a senior government official said on Monday.

The official said the provisional levy on sugar prices – based on the government-set cane prices – had gone up as cane prices paid to the farmers this season had increased sharply. The government has set the fair remunerative cane price that mills have to pay to farmers this season at Rs 129.76 a quintal, up from last year’s statutory minimum price of Rs 81.18.

Levy sugar price, paid to mills, has remained unchanged at Rs 13.06 a kg from 2003-04, despite rising cane prices. Mills are obliged to sell a certain percentage of their net sugar output as levy sugar to the government, which is then distributed to the poor at subsidised rates.

The Cabinet last week approved an amendment in the Essential Commodities Act, clarifying that calculation of levy sugar price would be based solely on the price declared by the central government and would not take into account the cane price fixed by a state government or that agreed between millers and farmers.

“The amendment is being made only as a measure of legal safeguard... The approved amendment does not in any way alter the present status regarding the power of state government to fix the state-advised price of sugarcane,” Ambika Soni, minister of state for information and broadcasting, said.

Another government official said the government may soon seek Cabinet approval for raising the price paid by consumers for purchasing levy sugar from fair price shops.

“We’ll have to go to the Cabinet, as the central issue price of sugar under the public distribution scheme will have to be raised in tandem with the levy price hike,” the official said.