Just a few days before the model code of conduct for the Lok Sabha elections comes into effect, top sugar producer Maharashtra has decided to buy sugar for its public distribution system (PDS) from the co-operative sugar mills in the state. The Centre had abolished levy sugar and monthly release mechanism in April 2013 on the recommendation of the C Rangarajan committee. Prior to this, the sugar mills had to supply 10% of their sugar output as levy quota for the PDS system at a price lower than the market rate. After the partial de-control, the state governments were asked to establish transparent systems to procure PDS sugar at Rs 32 a kg. The Centre will bear the difference between the purchase price and the selling price (Rs 13.50 a kg). Many state governments had opted to buy the sweetener from open market through tenders. But the Maharashtra government could not get any response from traders due to strict purchase conditions. Earlier, the Federation of Co-operative Sugar Factories of Maharashtra (Sakharsangh) had demanded that the state government should procure sugar from the cooperative sugar mills at the prevailing market rate. The state government made the mills supply sugar to the PDS system by fulfilling their quota obligations, which they were supposed to fulfil before the abolition of levy system. Absence of fresh PDS procurement has created shortage at manyPDS shops. Now, the state government has decided to sign an MoU with Sakharsangh, which in turn will sign MoU with the sugar co-operatives located in each district or nearby areas. “For March, the state government will procure sugar at the average price of market rate from February 21 to 28. From April onwards, the average price of the first 25 days of a month will be the procurement price,” said Sanjiv Babar, managing director, Sakharsangh. He added: “The state government will bear the transportation cost for delivery ofsugar while the payment will be against delivery.” The current ex-mill rate in Maharashtra is about Rs 25.50 a kg. The transport and other charges will be about Rs 2.50 a kg.
The monthly PDS requirement of the state is 1.39 lakh quintal but during the festival months of Ganapati and Diwali, it goes up to 1.84 lakh quintal per month.