In a move towards decontrol of the sugar sector, the government has decided to allocate the open market sale quota for the next four months (December-March) instead of current system of quartely release.
The food ministry, which oversees the sugar sector, is likely to allocate seven million tonne of sugar for the next four months of 2012-13 fiscal. “We are moving from quarterly to a four-monthly release of sugar to test if this quota system can be dispensed with in step towards deregulation,” a senior food ministry official said.
That apart, the ministry has decided not to put any condition for selling the open market sale quota. Earlier, it used to direct mills to sell atleast a minimum quantity of sugar every month out of total quarterly quota. The sugar sector is controlled by the government. Through regulated release mechanism, the food ministry allocates sugar quota to be sold in the open market be each mills. Currently, the quota is fixed on a quarterly basis.
Recently, the Rangarajan Committee has recommended doing away with the regulated release mechanism and advocated giving freedom to mills to sell sugar in the open market.
“We have decided to allocate seven million tonnes of sugar for open market sale during December-March period,” the official said. The monthly requirement is about 1.7 million tonne.
The country has produced 26 million tonne of sugar in the 2011-12 marketing year (October-September), against the annual demand of 22 million tonne.