Indian sugar mills association

Export sugar or else sell it to government at rationing prices: Devendra Fadanvis to sugar mills

Date:	08 Jan 2016

Source:	The Economic Times

Reporter:	ET Bureau

News ID:	5133

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PUNE: Mounting pressure on the sugar mills to export sugar, Maharashtra chief minister Devendra Fadanvis warned mills of action like collecting sugar from them at regulated prices for PDS. The state government is also looking into the allegations of speculative activities in sugar through NCDEX and may probe the issue by instituting a committee.

""If exports do not take place, we may have to think about taking sugar from mills at regulated price as a mandatory measure for distributing through the public distribution system," said Fadanvis while speaking at the annual general body meeting of the Vasantdada Sugar Institute (VSI), Pune.

The central government has fixed mill-wise quota for export of sugar to reduce the excess sugar from the country and help the prices to improve. The subsidy of Rs 45/tonne for cane payment is linked with fulfilling the export quota and also fulfilling the ethanol supply obligation.

"When the domestic prices go up, mills do not respond to the export promotion schemes. if export does not happen, then we have to take some action,"he said.

Nationalist Congress Party chief Sharad Pawar said, "Sugar prices rose from Rs 21/kg to Rs 29/kg. But there is no off take of sugar at mill level. There is no alternative to exports."

However, he added that the sugar prices will remain good for next 2 to 3 years. "But there may not be enough cane in Maharashtra and Karnataka, which can lead to less crushing," said Pawar.

The CM also said that price volatility in sugar is a matter of concern for the government. "We need to see which market forces are responsible for this as mills have been telling us that there is no off take of sugar. Lakhs of tonnes of sugar is being on the NCDEX. But actual physical delivery is hardly 25% to 30%. This leads to price volatility and the sugar mills have to bear with its adverse consequences. These forces, who first take the prices up and then pull them down, need to be controlled and the government will look into it," he said.

Co-operation minister Chandrakant Patil said that traders have been just quoting high prices during mill tendering. But they are not lifting the sugar at these prices. "We may set up a committee to study all these aspects of price volatility," said Patil.

Patil said that despite the provision in the act to take legal action against those mills that do not pay the FRP within 14 days after delivery of cane, his government had not taken action. "We gave crushing license to the defaulting sugar mills by taking in writing from them on a stamp paper that they will clear their dues within a month. Despite giving in writing, 44 mills have arrears to the tune of Rs 330 crore," he said.

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