Indian sugar mills association

Government to check sugar mills from selling in excess

Date:	08 Mar 2012

Source:	The Economic Times

Reporter:	Rituraj Tiwari

News ID:	982

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NEW DELHI: The government is readying steps to curb sugar companies in three states that sell the sweetner in excess of their fixed monthly quota by exploiting a legal loophole.

Around 20 sugar mills in Uttar Pradesh, Maharashtra and Karnataka have moved courts to allow additional releases on the pretext of paying cane price arrears.

The sugar directorate will try to stop these mills by getting the court orders quashed.

"We are taking steps to stop these factories. Recently, we restrained 12 companies in Andhra Pradesh which were selling sugar above their quota through various court orders," a top sugar directorate official said.

"The directorate will now train its guns on sugar companies in Uttar Pradesh and Karnataka which have offloaded around 4 lakh tonne sugar collectively in excess of their monthly quota," he said.

"We also know that a few mills in Maharashtra are going to move court to sell sugar in excess of their monthly quota. We are preparing to stop them from seeking court intervention."

According to the sugar control order, the monthly quota of each mill and the aggregate quantum for the country is decided to keep prices stable and ensure sufficient availability of sugar in the market.

"However, sugar mills often bypass the monthly quotas by getting court orders for additional releases on the pretext of paying cane price arrears. This can lead to oversupply, triggering a price decline. It is important to control this to maintain a balance between demand and supply," he said. The government has allocated 1.35 million tonne of free sugar for mills in March 2012. It released 1.4 million tonne last month.

"We are waiting for the C Rangarajan committee`s recommendations on sugar decontrol. If it is favourable, most of our problems will be solved," said a sugar miller from Uttar Pradesh.

The committee was formed in January to examine issues related to decontrolling of the sugar sector. It is likely to submit its report in the next six months.

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