Govt planning to double sugar levy quota to 20%

NEW DELHI: In a concerted bid to make sugar, currently retailing anywhere between Rs 33-35 per kg, more affordable to PDS consumers, the Centre is mulling doubling the levy quota for sugar to 20% of a mill���s total output. Simultaneously, it could hike the price of levy sugar from Rs 13 to Rs 20.

This was indicated at a meeting here on Monday between food minister Sharad Pawar and the industry, which increased pressure on the government to allow a free float in the price of open market sugar in the absence of ample supply to meet domestic demand.

The crucial meeting was aimed at urgently charting out, ahead of the festival season, a ���mutually agreeable pact��� by which consumers can access cheaper sugar and industry does not incur marked losses on sugar processing/production costs on account of relatively low wholesale prices.

However, a measure that will make up for the sugar industry���s loss due to the hike in levy sugar quota is yet to be firmed up and is likely to be done over a series of meetings scheduled later this week.

���I can tell you that the industry���s attitude was quite constructive. They would like to co-operate (with) the government and (are) ready to find some solution where we will be able to improve availability in the open market and in the public distribution system,��� Mr Pawar said after the meeting. ���We will probably be able to reach some understanding when we meet again this week,��� he added.

In a sharp reaction on Monday, spot sugar prices shot up more than 2%, supported by lower supplies and festive demand.