Sugar millers call for a regulator
Sugar millers have asked the government to set up an independent regulator to look into the issues of cane pricing and allocation of sugarcane to different factories.
By PTI |
NEW DELHI: Sugar millers have asked the government to set up an independent regulator to look into the issues of cane pricing and allocation of sugarcane to different factories. ���The one single policy request... Is for the government to set up an independent and high-powered regulatory body similar to the telecom and electricity regulatory bodies,��� said Indian sugar mills association president Ranjit Puri said at a function organised by the body here on Monday.
���The proposed regulator should look into the twin questions of the pricing of sugarcane and its allocation to different factories he said. The millers have expressed concern about the lack of correlation between the price of raw material and that of finished products. The cane price is fixed by the states who take no responsibility for the price of sugar,��� said Mr Puri. Citing practices in other countries he said cane rates elsewhere depend on the price of raw sugar realised, but the rates of the sweetener in India is delinked from payment for canes.
On top of this, the states disown any responsibility about sugar price despite announcing prices much beyond the rates fixed by the Centre, Mr Puri explained.
The industry body has also said it is not against paying right price to farmers, but the problem starts when mills are not able to pay the high price set by the states.
Uttar Pradesh, the country���s second largest sugar producing state, had in October raised the state advisory price of cane by Rs 15 to Rs 140 a quintal for common variety that is much higher than the Centre���s statutory minimum price
at Rs 81.18 a quintal.
The government had last year came up with an export package of Rs 1,350 per tonne for sugar mills located in coastal area and Rs 1,450 crore for those in remote areas to help them avoid glut in the domestic market following two years of bumper output. It had also created a buffer stock of 50 lakh tonnes.
The millers have also asked for sufficient supply of cane to factories and economies of scale saying the industry is seasonal.
However, differing with the view of a section of the industry that sugar imports be allowed, ISMA said such a move would be unwarranted as the country will have about four months of the sweetener in stock by October 2009 even according to the most pessimistic estimate.
���The proposed regulator should look into the twin questions of the pricing of sugarcane and its allocation to different factories he said. The millers have expressed concern about the lack of correlation between the price of raw material and that of finished products. The cane price is fixed by the states who take no responsibility for the price of sugar,��� said Mr Puri. Citing practices in other countries he said cane rates elsewhere depend on the price of raw sugar realised, but the rates of the sweetener in India is delinked from payment for canes.
On top of this, the states disown any responsibility about sugar price despite announcing prices much beyond the rates fixed by the Centre, Mr Puri explained.
The industry body has also said it is not against paying right price to farmers, but the problem starts when mills are not able to pay the high price set by the states.
Uttar Pradesh, the country���s second largest sugar producing state, had in October raised the state advisory price of cane by Rs 15 to Rs 140 a quintal for common variety that is much higher than the Centre���s statutory minimum price
at Rs 81.18 a quintal.
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Mr Puri said mills were able to liquidate a significant part of cane arrears due to the Centre���s assistance in the form of export incentives buffer stocks and loans of Rs 4,000 crore against excise duty collection. The government had last year came up with an export package of Rs 1,350 per tonne for sugar mills located in coastal area and Rs 1,450 crore for those in remote areas to help them avoid glut in the domestic market following two years of bumper output. It had also created a buffer stock of 50 lakh tonnes.
The millers have also asked for sufficient supply of cane to factories and economies of scale saying the industry is seasonal.
However, differing with the view of a section of the industry that sugar imports be allowed, ISMA said such a move would be unwarranted as the country will have about four months of the sweetener in stock by October 2009 even according to the most pessimistic estimate.
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