CBEC to keep tabs on sugar released by mills
The food ministry has asked the Central Board of Excise and Customs (CBEC) to keep a tab on sugar stocks released by mills as part of its efforts to prevent hoarding.
By Deepshikha Sikarwar, ET Bureau |
NEW DELHI: The food ministry has asked the Central Board of Excise and Customs (CBEC) to keep a tab on sugar stocks released by mills as part of its efforts to prevent hoarding and check retail prices from spiralling further ahead of the festive season and the upcoming polls in three states.
Sugar prices have continued to rise despite the government cracking down on hoarding and allowing duty-free import of raw and ready-to-eat sugar. Retail sugar prices are now Rs 37-40 a kg, up sharply from Rs 30 a few months back and Rs 16-17 a kg a year ago.
The ministry has sought a report by September 20 from the apex indirect tax body on the stocks released by mills, a CBEC official told ET. The idea is to ensure that mills are releasing adequate amount of sugar in the market and not holding back to benefit for the scarcity driven prices.
International sugar prices have also hardened to near 30-year high in anticipation of large imports from India and lower production. At these prices imports have become unviable for India.
Earlier, the government had imposed stock-holding and turnover limits for sugar trade and directed state governments to strictly enforce stock limits and take stringent action against offenders under the Essential Commodities Act, 1955. Even these measures appear to have little impact as consumption is far ahead of production.
Sugar consumption in India, the world���s largest consumer of the sweetener, is estimated to have reached about 23 million tonnes in 2008-09 season (October-September) from 21.8 million tonnes in the previous year, according to official data. Meanwhile, the domestic production in the current year is estimated at about 15 million tonnes against nearly 26 million tonnes last year because of the low sugarcane acreage and the drought in many regions.
Nearly 65% of the total sugar consumed goes to bulk consumers such as food processing and beverage companies, and the remaining is sold through the retail market.
The excise department collects production data to check tax evasion by units. The government wants to use the data available with the department to monitor the flow of sugar and is stocks. The idea is to ensure that that adequate stocks are released on time and reach retail markets. A similar such instruction was issued ahead of general elections by the CBEC.
The move comes in the backdrop of certain sections in the government holding the view that mills may be holding onto stocks, thereby causing artificial shortage, the official said.
Sugar prices have continued to rise despite the government cracking down on hoarding and allowing duty-free import of raw and ready-to-eat sugar. Retail sugar prices are now Rs 37-40 a kg, up sharply from Rs 30 a few months back and Rs 16-17 a kg a year ago.
The ministry has sought a report by September 20 from the apex indirect tax body on the stocks released by mills, a CBEC official told ET. The idea is to ensure that mills are releasing adequate amount of sugar in the market and not holding back to benefit for the scarcity driven prices.
International sugar prices have also hardened to near 30-year high in anticipation of large imports from India and lower production. At these prices imports have become unviable for India.
Earlier, the government had imposed stock-holding and turnover limits for sugar trade and directed state governments to strictly enforce stock limits and take stringent action against offenders under the Essential Commodities Act, 1955. Even these measures appear to have little impact as consumption is far ahead of production.
Sugar consumption in India, the world���s largest consumer of the sweetener, is estimated to have reached about 23 million tonnes in 2008-09 season (October-September) from 21.8 million tonnes in the previous year, according to official data. Meanwhile, the domestic production in the current year is estimated at about 15 million tonnes against nearly 26 million tonnes last year because of the low sugarcane acreage and the drought in many regions.
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Nearly 65% of the total sugar consumed goes to bulk consumers such as food processing and beverage companies, and the remaining is sold through the retail market.
The excise department collects production data to check tax evasion by units. The government wants to use the data available with the department to monitor the flow of sugar and is stocks. The idea is to ensure that that adequate stocks are released on time and reach retail markets. A similar such instruction was issued ahead of general elections by the CBEC.
The move comes in the backdrop of certain sections in the government holding the view that mills may be holding onto stocks, thereby causing artificial shortage, the official said.
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