To reduce dependency on raw sugar imports and also to increase sugar availability, the government is considering a proposal to give incentive to mills to start early crushing by exempting them from selling 10% of their output at below market prices as levy sugar.
?We are planning to incentivise sugar mills to start early crushing in order to increase supplies,? official sources said, adding that proposal could be considered by the Cabinet soon.
The government in April allowed duty-free imports of raw sugar until August 1 to be processed and sold domestically, without any export obligation.
Under an earlier program still in effect, the mills can import raw sugar without duty until Sept. 30 for processing and selling locally, provided they export an equivalent quantity of refined sugar within three years. This year, sugar prices have climbed up by more than Rs 10 per kilogram because of more than 10 million tonnes fall in production to around 15 million tonnes.
Although, cane harvest production also dropped to around 289.23 million tonne from last year?s 348.18 million tonne because of fall in acreage in western Uttar Pradesh and Maharashtra, but much of the blame for low sugar output was also put on delayed crushing by millers which lead to fall in recovery rates.
The Centre had been taking a series of measures since last year to control sugar prices that included releasing additional quantities of sugar, imposing restrictions on export of sugar, suspending futures trade in sugar and imposing stock and turnover limits on traders. In April it allowed duty-free imports of raw sugar until Aug. 1 to be processed and sold domestically, without any export obligation. Under an earlier program still in effect, the mills can import raw sugar without duty until September 30 for processing and selling locally, provided they export an equivalent quantity of refined sugar within 3 years. Sources said sugar availability will increase by these measures.