Centre, 10 states to meet for cane price consensus
The Centre has called a meeting of 10 sugarcane producing states on October 3 to thrash out a consensus on two critical issues of aligning cane prices with sugar prices and blending ethanol with petrol.
By PTI |
NEW DELHI: The Centre has called a meeting of 10 sugarcane producing states on October 3 to thrash out a consensus on two critical issues of aligning cane prices with sugar prices and blending ethanol with petrol.
“The meeting would take up critical issues on sugar pricing and ethanol blending. Sugar industry executives have been requesting for a policy direction on sugar pricing and clarity on blending of 10% ethanol in petrol,” a senior agriculture ministry official said. The meeting would be chaired by food and agriculture minister Sharad Pawar, he added.
The issue of making 10% blending of ethanol optional from October 2007 and mandatory from October 2008 except in Jammu and Kashmir, North-East and island territories is to be taken at the meeting, ministry sources said.
Sugar industry is awaiting a clarity from the government on the two issues. A senior industry official said: “We hope that the government would be able to come out at least with a policy direction soon, even if there are no consensus in the Wednesday meeting. The political difference has been a major bottleneck in arriving at a formula on sugarcane pricing and ethanol blending.”
A group of ministers (GoM) has also endorsed food ministry’s proposal to convene a meeting of major sugar producing, an official said.
As per the Sugarcane Control Order, the Centre is authorised to fix the Statutory Minimum Price (SMP) to be paid by sugar mills. However, states like Uttar Pradesh, Bihar, Tamil Nadu, Punjab, Haryana and Uttarakhand announce the SAP, which are generally higher than the SMP.
For sugar season 2006-07 ending September, the SMP of sugarcane was Rs 80.25 per quintal and is linked to recovery level, while the SAP in UP was Rs 125 a quintal.
India produced 280 lakh tonne of sugar in 2006-07 against the consumption demand of 190 lakh tonne. Sugar prices have crashed due to over-production, leading to huge losses to sugar mills.
“The meeting would take up critical issues on sugar pricing and ethanol blending. Sugar industry executives have been requesting for a policy direction on sugar pricing and clarity on blending of 10% ethanol in petrol,” a senior agriculture ministry official said. The meeting would be chaired by food and agriculture minister Sharad Pawar, he added.
The issue of making 10% blending of ethanol optional from October 2007 and mandatory from October 2008 except in Jammu and Kashmir, North-East and island territories is to be taken at the meeting, ministry sources said.
Sugar industry is awaiting a clarity from the government on the two issues. A senior industry official said: “We hope that the government would be able to come out at least with a policy direction soon, even if there are no consensus in the Wednesday meeting. The political difference has been a major bottleneck in arriving at a formula on sugarcane pricing and ethanol blending.”
A group of ministers (GoM) has also endorsed food ministry’s proposal to convene a meeting of major sugar producing, an official said.
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“There is a need for rationalisation in SAP (State Advised Price) for aligning cane prices with sugar prices to neutralise the impact of high support price on the sugar economy,” he said. The GoM was set up under external affairs minister Pranab Mukherjee to look into the problems of sugar industry and suggest relief measures for the mills as well as cane farmers. As per the Sugarcane Control Order, the Centre is authorised to fix the Statutory Minimum Price (SMP) to be paid by sugar mills. However, states like Uttar Pradesh, Bihar, Tamil Nadu, Punjab, Haryana and Uttarakhand announce the SAP, which are generally higher than the SMP.
For sugar season 2006-07 ending September, the SMP of sugarcane was Rs 80.25 per quintal and is linked to recovery level, while the SAP in UP was Rs 125 a quintal.
India produced 280 lakh tonne of sugar in 2006-07 against the consumption demand of 190 lakh tonne. Sugar prices have crashed due to over-production, leading to huge losses to sugar mills.
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