Statutory minimum price to be made the only legitimate one.
Our Bureau
New Delhi, Dec. 22 The Centre seems to be preparing the ground for allowing
freer imports of duty-free raw sugar against advance licenses (AL), going by
the Union Food and Agriculture Minister, Mr Sharad Pawar's, comments at the
74th Annual General Meeting of the Indian Sugar Mills Association (ISMA) here.
Comfortable supply
Although it recently revised downwards its projection of domestic sugar output
for the current 2008-09 season (October-September) from 22 million tonnes (mt)
to 20.5 mt, the Centre has so far been maintaining that the overall supply
position is comfortable. This, given the estimated carry-over stocks of 10.5 mt
and a domestic consumption requirement of 22 mt.
But on Monday, Mr Pawar appeared to be conveying a different picture. "As per
the initial estimates regarding availability of sugarcane and thereby
production of sugar, 2008-09 seemed to be a reasonably comfortable
season.However, recent reports from some of the States indicate that the
sugarcane availability would be substantially less than as estimated earlier",
he said in his inaugural address at the ISMA meeting.
Low output
Later, speaking to presspersons, Mr Pawar noted that Maharashtra (the country's
No. 1 sugar manufacturing State) was originally expected to produce 6.2 mt in
the current season, but has now apparently lowered the figure to 4.9 mt.
Likewise, States such as Uttar Pradesh and Karnataka have so far recorded
lower-than-projected cane yields as well sugar recoveries.
"We are continually monitoring the situation. Let me assure you that whatever
decision we may take in future in this regard would be in the best interest of
not only the sugar industry and the sugarcane farmers, but also the consumers
of sugar", Mr Pawar said, adding that he had not only held the Food Ministry
but also the Consumer Affairs portfolio.
A precursor?
Mr Pawar's statements are being seen by industry observers as a precursor to
relaxation in the existing 'grain-to-grain' norms governing duty-free imports
of raw sugar against ALs. Currently, these are permitted only if mills
re-process the same material into white sugar within 24 months of the licence
being issued.
A section of the industry has been demanding an easing of this 'grain-to-grain'
condition to enable sale of the white sugar (processed from the imported raws)
first in the domestic market. The re-export obligation can be separately met
later on a 'tonne-to-tonne' basis, without the requirement that the white sugar
being shipped out is processed from the imported raw grain.
In his address, the ISMA President, Mr Ranjit Puri, observed that in the
current 'grain-to-grain' framework, the mills importing raws would have to
themselves discharge the re-export obligation.
"In the past, when there was a real shortage of sugar in the country, this
policy was relaxed, in that the export obligation could be fulfilled by exports
through another entity. Today, when there is a balance between demand and
supply, we are wholly opposed to such a relaxation", he said.
State-advised Prices
On the issue of State Governments 'advising' (fixing) cane prices much above
the Statutory Minimum Price (SMP) set by the Centre, Mr Pawar said he had
organised a meeting with Food Ministers of all major sugar-producing States in
October 2007 to convince them not to resort to this practice.
"Unfortunately, we could not arrive at any consensus. We may have to undertake
an amendment to the law (governing cane pricing) to make the SMP the only
legitimate price. But this is not the time for that and it will not happen
unless the composition of Parliament is changed", he pointed out.
http://www.thehindubusinessline.com/2008/12/23/stories/2008122350461500.htm
Deeds, like seeds, take their own time to fructify.
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