NEW DELHI, June 24: The Food Ministry is considering a proposal to reduce the quantity of sugar that mills need to contribute for supply through public distribution system.
At present, sugar mills are required to provide 10 per cent of their total production as levy sugar, which is meant for PDS, at subsidised rates.
Mills supply levy sugar to the government at Rs 19/kg, against the open market price of Rs 30-32 per kg.
“The sugar industry has demanded a reduction in the percentage of levy sugar. We are examining the proposal,” a senior Food Ministry official said.
The sugar industry has sought levy sugar quota to be reduced to 5 per cent from the existing 10 per cent in the 2011-12 marketing year (September-October) to save their inventory costs, sources said.
Though the annual PDS demand for sugar is 24-26 lakh tonnes, the average lifting by the state governments has been only 16 lakh tonnes in the last six years, they said.
In a representation made to the Food Ministry, the sugar industry contended that there is a case for a cut in levy sugar quota as the government has not been able to lift the entire quota in the last few years and consequently the carry forward stock has increased to 21 lakh tonnes for the 2011-12 marketing year.
Higher carryover stock plus 26 lakh tonnes of levy sugar from this year’s output would take total availability of sugar for PDS purpose to 47 lakh tonnes for 2011-12, much higher than the actual requirement, it said.
The country’s sugar production is estimated to be 26 million tonnes in the 2011-12 marketing year as against 24.5 million tonnes in the previous year. (PTI)
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