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Price of levy sugar should be increased: Sakthi Sugars

M Manickam, MD, Sakthi Sugars, says that it is high time that the price of levy sugar is increased. He also says that in reality 80% of the levy sugar gets diverted to the black market.

September 20, 2012 / 16:06 IST
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M Manickam, MD, Sakthi Sugars, says that it is high time that the price of levy sugar is increased. He also says that in reality 80% of the levy sugar gets diverted to the black market. Levy sugar which is diverted does have an impact on the open market prices as most of it is actually being taken out.  Increase in price will discourage such factors and make sure that open market is supported.

Below is the edited transcript of his interview to CNBC-TV18. Q: Do you think at this point there could be a price hike of Rs 10 in levy sugar and will this hike help the millers?
A: It is high time that the price is increased. Though it is said that it has no relevance to the market, but in reality 80% of the levy sugar gets diverted to the black market.
Southern states have a good PDA system, whereas in many states PDA system does not exist. Levy sugar which is diverted does have an impact on the open market prices as most of it is actually being taken out.  Increase in price will discourage such factors and make sure that open market is supported. Q: Is it possible that the levy quota now will be declared for six months at a time and not quarterly as it is done. How does that operationally impact similar companies?
A: This is a good step. Infact, after a long time somebody is thinking about the sugar sector. So we are getting back on track and it is a welcome step. Q: By when do you expect the Rangarajan Committee report to be out, any indications?
A: I have no idea when the report will be out. Q: Do you expect anything to be implemented in the near term?
A: Some of the state governments have not supported it so this is a concurrence subject where both the state and the Centre will have to take a view. So some of it may get implemented, some of it may not. Q: Global raws at 19.5 getting close to lows, what's the situation looking like in terms of Brazil and also India the monsoons have picked up, has the expectation of a deficit now reduced?
A: Not really. We have to wait till December to make a predication as to what kind of crop will be available for next year, but I think we will be more in balance than shortage right now.
 
 
 
first published: Sep 20, 2012 03:56 pm

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