Sweet news for millers as government signs sugar pact

PUNE: Giving respite to the sugar mills, which are dealing with the problem of low sugar prices and over production, Maharashtra government signed an MoU with the Maharashtra co-operative sugar mills federation on Thursday to procure sugar for its public distribution system (PDS) from the sugar co-operatives at the market rate for next three months.

Sanjiv Babar, managing director, Sakharsangh said, “We are happy that the government took this decision , which was our long standing demand.” The government will buy 1.39 lakh quintal sugar from the sugar co-operatives in April for PDS distribution. There will be a new government in office in June, which will have to take the decision about making a permanent arrangement for buying sugar for public distribution.

The central government had lifted the obligation on sugar mills to provide levy sugar at subsidised rate for the government’s PDS operations. The Maharashtra government in its government resolution (GR) has said that it tried to get the sugar from the mills from the quota obligation the mills had to fulfill at the time of its lifting.

It faced problem in procuring the pending levy sugar as mills moved the court. The government could get only 2% sugar from the mills in January and could not get any sugar in February. The state government had decided to procure PDS sugar from the open market by e-tendering . The GR says that despite increasing the due date of the e-tender twice, it did not get a single response except for the Gondia district, where it received three applications but at higher than the market rate.

The memorandum of understanding (MoU) was signed between the department of civil supplies and public distribution and Maharashtra Co-operative Sugar Factories Federation (Sakharsangh ) on Thursday. As per the MoU, the state government will procure sugar from Sakharsangh for a period of five months from February to June, 2014, during which period, it intends to complete the e-tendering process for open market purchase of sugar.