The Hindu : National : Centre urged to contain sugar prices

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Monday, Feb 07, 2005

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National

Centre urged to contain sugar prices

By Our Special Correspondent

NEW DELHI, FEB. 6. The Shiv Sena has urged the Centre to review the sugar position in the country to contain sugar prices in the retail market and ensure availability in the next two years, if necessary, by importing refined sugar. In the last two months, sugar prices have jumped from Rs. 17 to Rs. 22 per kg, particularly on account of large-scale futures trading, forcing the Government to come up with quick measures for damage control.

In a letter to the Union Food and Agriculture Minister, Sharad Pawar, the convener of the action committee for essential commodities, K. Gidwani, said the Government would have to import at least 25 lakh tonnes of sugar each year in the next two years. While the Government claimed a carry forward stock of 85 lakh tonnes, the "physical checks'' conducted by industry showed that several mills had violated the release mechanism and sold greater quantities because of which the available stocks were "not more than 60 lakh tonnes."

Fall in output

Against the expected sugar production of 115 lakh tonnes this season, the Government would not be left with more than five to 10 lakh tonnes for 2006-07 owing to drought in Maharashtra and Karnataka. "Keeping in mind that the Government must hold at least a buffer stock for two to three months, it would have to go in for imports."

On the issue of industry being allowed to import up to 20 lakh tonnes of duty-free raw sugar under the advanced licence scheme, this year, re-exportable as refined sugar in three years (against initially in 18 months), Mr. Gidwani said he had written to the Prime Minister, Manmohan Singh, that the total revenue loss was to the tune of Rs. 1000 crores and likely to go up. The raw sugar was being diverted in the domestic market and the difference between the imported duty free sugar and the domestic price of sugar was about Rs. 8,000 per tonne.

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