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Government wants to end sales quota in sugar industry

CHENNAI: Food and agriculture minister Sharad Pawar said on Friday he favoured ending the government's role in fixing sales quota in sugar industry, adding that the government would consider withdrawing controls on the sector after assessing the likely sugar production in 2010-11 crop year. The minister said a decision on decontrolling the sugar industry could be taken if there is good production in the next crop year starting October. At present, the government controls the sugar industry right from fixing the support price of sugarcane and allocating the monthly quota for mills to sale in the open market. "We welcome the minister's statement on decontrol of the sugar market, which was long-awaited," Indian Sugar Mills Association (ISMA) deputy director general M N Rao told a news agency.

Sugar industry is heavily regulated, right from cane to sale of sugar. There is a minimum support price for sugarcane and over and above that there is a state advisory price. Sugarcane command area is determined and approved by state governments. Sugar mills can't sell freely in the open market as there are quotas for open sale. "There are multiple spokes in the wheel now. Besides, with nearly 12 to 15 crore people involved with the sugar business, we need to see in what form and shape the decontrol happens. Ideally, total decontrol is the best," K Jayachandra, joint MD of Empee Sugars and Chemicals, told TOI. Pawar acknowledged that sugar sector was heavily regulated. "This is the time (millers) and the government should sit together to decide on easing restrictions on sugar sector," he said. Upon receiving the news, sugar stocks flared up at the bourses. Almost all sugar stocks ended the day with gains. Simbhaoli Sugars was up 5.2% at Rs 42.7, Balrampur Chini improved by 3.8%, Shree Renuka was up