The government might completely abolish the release-order mechanism of sugar or make it either quarterly, half-yearly or yearly as part of its proposed move to de-regulate the sugar industry. Currently, the government has fixed the quantum of sugar that each mill can sell in the open market every month. However, the mills have long been demanding that the release-order mechanism, wherein the government decides the quantum of sugar mills can sell in the open market every month, should be scrapped to allow mills to produce and sell according to demands of the market .

Though the sugar de-regulation order is yet to be placed before the Cabinet, official sources said that once the order was passed, the mills will become more independent to sell their produce. “We might completely abolish the release-order mechanism or make it quarterly, half-yearly or even annually,” a senior government official said.

The other proposal under consideration for de-regulating the sugar industry was the abolishing of that portion of the sugar (control) order that stipulates that mills are to deliver 10% of the sugar produced by a unit as ‘levy’ for the public distribution system (PDS). Even for the rest 90% of the produce, the Union government has decided on the quantum of sugar-releases to be offloaded by each mill in a month.

Sources said that though the proposal could not be placed before Thursday’s Cabinet meeting, the government was keen to take it up after the trust vote on July 22. If cleared, the sugar decontrol order will bring to an end ther state control on the sugar industry, first implemented in 1966. According to the industry sources, the country’s sugar production is likely to be around 26.5 million tonne during crushing season of 2007-08 (October-September). According to official estimates, the production was pegged at 25.1 million tonne by end of May 2008, which is well below the 27.10 million tonne achieved during 2006-7.

The country’s sugar production was only 12.6 million tonne during 2004- 5, which rose to 19.2 million tonne during 2005-6.

During 2006-7, sugar production reached record 28.3 million tonne.