Govt takes measures to tide over sugar shortfall

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Tens of thousands of India's sugarcane growers swarmed through the country's capital on Thursday demanding higher prices for cane, forcing the prime minister to consider changes in fixing cane rates.

The protest has delayed cane crushing in Uttar Pradesh, the second-biggest sugar producing state, threatening to increase India's dependence on the imported sweetener.

The country has taken a raft of measures to tackle sugar shortage, exacerbated by shrinking supply of cane.

India's sugar output in 2008/09 season fell 43% to 15 million tonnes from a year ago. Production is estimated at about 16-17 million tonnes in 2009/10.

India's sugar year runs from October to September.

The world's top sugar consumer has contracted imports of 5 million tonnes of raws and more than 300,000 tonnes of whites.

Here are the steps taken by the government since February 17:

February 17: The government allows mills to import duty-free raw sugar on condition that an equal quantity of white sugar would be exported within three years.

February 23: India imposes stock limits on sugar until July 9 to tame prices.

April 10: The country allows duty-free imports of white sugar. Asks three state-run trading firms and a farmers' cooperative to import up to one million tonnes of tax-free white sugar before Aug. 1. It exempts mills importing raws until July 31 from an obligation to export whites.

May 26: India's commodities market regulator bars the launch of new sugar futures contract until the end of 2009 to check speculation and price rise.

June 19: The government extends sugar stocks limit until Jan. 8, 2010, to ensure adequate supplies in the local market.

June 25: India raises the minimum price that mills must pay to farmers for sugarcane by a third to a record high of 107.76 rupees per 100 kg to encourage farmers to plant more.

July 31: India extends duty-free imports of raw and refined sugar.

August 25: The government asks large consumers to keep sugar stocks enough to meet their requirement for 15 days from 30.

September 24: Farm Minister Sharad Pawar says India will extend duty-free white sugar imports deadline to June 2010.

October 21: India extends deadline for duty-free white sugar imports to Dec. 2010.

October 29: The government fixes a "fair and remunerative" price of 129.84 rupees (USD 2.80) per 100 kg of 2009/10 cane crop.

November 13: India issues formal orders extending tax-free imports of raws until Jan. 1, 2011 and whites until Mar. 31, 2010.

November 19: The ruling Congress party says Prime Minister Manmohan Singh will consider changes in fixing cane prices after farmer leaders disrupt parliament demanding higher returns on cane.