Sugar mills to sell dismantled buffer in fixed schedule

Written by Commodities Bureau | New Delhi, Oct 2 | Updated: Oct 4 2008, 04:41am hrs
The Centre on Thursday directed sugar mills to sell 75% of their dismantled second buffer stocks of 3.0 million tonne in a fixed schedule. The step is contrary to its earlier order, which said mills could sell the dismantled stock in open market anytime during the coming season, which starts in October.

This will make an additional 6, 00,000 tonne sugar available during the main festival months of October-December, which will push up total free-sale sugar availability to around 5.2 mmt during the quarter, which also includes 200,000 tonne unsold from previous quarter. The normal free-sale quota of Oct-Dec has been fixed at 4.4 million tonne.

The scheduled dismantling of buffer was announced following complains that some mills were selling the dismantled stock in one go or were planning to hold on to the buffer for sale at a later stage, a senior government official said.

Under the reversed order, sugar mills will have to sell 30% of the dismantled buffer (which is 75% of 3.0 million tonne) in the first quarter (Oct-Dec), 20% in the second quarter (Jan-Mar), 30% in third quarter (Apr-June) and 20% in the period of July to September.

In another significant decision, the government has also advised sugar mills to sell at least one-third of their monthly quota of non-levy sugar in the first fortnight of the month to avoid building up of stocks at the end of the month. This is meant to prevent pile-up of unsold stocks and hoarding by millers, the official added.

In October alone, the government hopes around 2.33 million tonne of sugar will be available in open markets for free sale, which should be sufficient to meet any demand rise.

In a separate order, the government has decided that the dispensation of not requiring release orders for export under advance licensing scheme shall continue till further orders. Same dispensation for exports under open general license will be extended till 31st October.