CII for deregulation sugar industry for prices to be determined by market forces

NEW DELHI: Industry chamber CII today said the Rs 75,000-crore sugar industry must be deregulated, so that prices of sweetener are determined by the market forces, ensuring better competition and benefits to all stakeholders.

"Complete liberalisation of the sugar sector is a must so that sugar prices are determined by the market forces ensuring better competition and benefits to all the stakeholders involved including cane farmers," CII said in a statement.

The chamber also welcomed the government's decision to remove the cap on sugar exports and place the commodity under the open general licence category like wheat and rice.

"The step was long-awaited and the industry welcomes the government's decision as it will help the industry get some much needed relief.

"Further decontrol of the sugar industry is the only way to achieve the sugar sector's full potential," CII Vice- President Ajay Shriram said.

CII said it hoped the expert committee on sugar decontrol, headed by C. Rangarajan will recommend further reforms like removal of levy sugar, linking of sugarcane price to sugar price, among others, in its report expected to be submitted by early July.

At present, the sugar industry is under government control, right from the level of production to distribution.

It said the government should exempt the sugar industry from compulsory packaging in jute bags and should allow packaging in any food grade bags. "The packaging cost in jute bags is very high compared to the other packaging material," it said.