January 17, 2012 / 09:38 IST
Private sugar industry body ISMA today met Finance Minister Pranab Mukherjee to push for partial decontrol of the sector that includes removing levy obligation and giving freedom to sell sugar in open market.
The industry has also demanded export of another two million tonnes of sugar in the 2011-12 season (October- September). The government has permitted one million tonnes of export so far this season.
"We have requested for removal of levy sugar obligation, finalisation of ethanol price formula and an aggressive export policy," Indian Sugar Mills Association (ISMA) President Gautham Goel told reporters after a meeting with Mukherjee.
At present, the sugar industry is under government control, right from the level of production to distribution.
The food ministry, which controls the sector, has made it mandatory on part of mills to sell 10% of their output to the government at cheaper rates for supply to ration shops.
ISMA Director General Abinash Verma said, "The removal of levy obligation of selling 10% of sugar production to government will solve the 50% problem of mills."
The industry supplies levy sugar at 60% of the cost of production, resulting in an annual loss of about Rs 2,500-3,000 crore, he said.
Apart from removal of levy sugar system, ISMA has sought scrapping of the quota system of allocating quantity of sugar that mills can sell in the open market.
Besides, ISMA has demanded that the Finance Minister finalise the pricing formula of ethanol as suggested in the report submitted by the Committee-headed by Planning Commission member Soumitra Choudhary.
The Committee has suggested a price formula for ethanol to be linked with petrol rates. At current petrol prices, ethanol price would be around Rs 32.5 per litre, Verma said.
On sugar exports, he said: "We have requested the government to allow additional two million tonne of export by March. We are going to have surplus sugar of 4 million tonne this season and there is a scope for more export."
ISMA's Goel mentioned that the Finance Minister has assured that it will take up these issues at the meeting of the Empowered Group of Ministers (EGoM) on food.
Narendra Murkumbi of Shree Renuka Sugars and Vivek Saraogi of Balrampur Chini were also present in the meeting.
Last month, Food Minister K V Thomas had said that he will discuss the issue (removal of levy sugar system) with the Finance Minister and Agriculture Minister Sharad Pawar after the just-concluded Winter Session of Parliament.
Sugar production of India, the world's second largest producer and the biggest consumer, is estimated to rise to 24.5 million tonne in 2011-12 season (October-September), as against the annual demand of 21.5 million tonne.
