Latest Sugar Policy

November 15, 2001 1. Levy Percentage:

Government has further reduced the levy percentage of domestic sugar producers from 30 to 15 with effect from 1st February 2001. Last year levy percentage was reduced from 40 to 30 with effect from 1st January 2000.

2. Statutory Minimum Price (SMP) of Sugarcane for 2001-2002 sugar season:

Government has announced the SMP of sugarcane payable by the sugar factories for the 2001-2002 sugar season at Rs.62.05 per quintal linked to a basic recovery of 8.5 percent, subject to a premium of Rs.0.73 for every 0.1 percentage point increase in the recovery above that level.

3. Levy Sugar Price:

The average all-India ex-factory levy sugar price for 2000-2001 sugar season was Rs.1165.79 per quintal. For 1999-2000 sugar season the average all-India ex-factory levy sugar price was Rs. 1110.71 per quintal. For 2001-2002 sugar season the levy sugar prices for each sugar zone would be announced shortly.

4. Restructuring of PDS for Sugar:

Government has decided that levy sugar supply under PDS will now be restricted to BPL families only in all States/UTs except in Northeastern States, hilly States and island territories. Earlier, with effect from 1.7.2000, income tax assesses & their families were excluded from levy sugar supply from PDS.

Government has decided that population base for coverage of PDS for sugar shall be the projected population as on 1.3.2000.

Government has decided to increase the per head per month of levy sugar under PDS from 425 gms. to 500 gms. States/UTs where the existing per head per month quantum of levy sugar is higher than 500 gms. would continue to be allotted levy sugar on the basis of their existing quantum.

5. Futures Trading in Sugar:

Government has announced its intention in principle for introducing futures trading in sugar.

Government has given approval to three exchanges to conduct futures/forward trading in sugar. These exchanges are e-Commodities Ltd., Mumbai; NCS Infotech Ltd, Hyderabad; and e-Sugar India, Mumbai. (Refer Press Note dated 13.11.2001).

6. Factory-wise quarterly release of freesale sugar:

Government has decided to make freesale release of sugar for each sugar factory on quarterly basis, instead of monthly basis as is being done now. In other words, each sugar factory would be given releases for three months at a time in advance. (Refer Press Note dated 13.11.2001).

Government has also decided to allow sugar factories to sell upto 10% of its quarterly freesale quota over and above its quota, within the quarter. Sugar factories will, however, be required to utilize the proceeds from the sale of additional quota for payment of cane price dues to the farmers only, for which the sugar factories would be required to submit utilization certificates from the Chartered Accountants, duly countersigned by the District Magistrates/Cane Commissioners. (Refer Press Note dated 13.11.2001).

7. Mahajan Committee’s Recommendation:

Government has taken final decision on all the recommendations of the Mahajan Committee.

8. Exports:

Government has allowed levy exemption to sugar factories on the quantity exported by them.

Government had allowed deferment in adjustment of the exported quantity of sugar for the purpose of monthly freesale releases by 12 months. Subsequently, in order to further boost the export of sugar from India, Government has decided to enhance the deferment benefit of adjustment of release of freesale sugar made for export purposes from 12 months to 18 months. (Refer Press Note dated 13.11.2001).

Government has allowed Duty Exemption Pass Book (DEPB) benefits on export of sugar @ 5% of the f.o.b. value of exports.

About 12.5 lakh tonnes of sugar has been exported from India during 2000-2001 sugar season (October-September)

Government has clarified that sugar factories can also undertake export of raw sugar in addition to mill – white sugar under the extant Import Export Policy. (Refer Press Note dated 13.11.2001).

9. Import Duty on Sugar:

The import duty on sugar had been increased to 60% with effect from 9.2.2000. The countervailing duty of Rs.850 per MT on imported sugar continues.

10. Advance Freesale Releases:

Government has framed guidelines for advance freesale release of sugar to the needy sugar mills subject to quantitative restrictions and voluntary contribution of levy at certain percentage. Press Note dated 31.5.2000 may be referred.

11. Freesale Quota for October – December:

Government has announced the monthly freesale quota of sugar for the October – December 2001 quarter as follows:

October

12.50 lakh tonns

November

11.50 lakh tonnes

December

11.25 lakh tonnes

12. Use of Ethanol blended petrol as auto fuel:

Government has decided to expand the production and distribution of gasohol (five percent ethanol blended petrol) to cover the entire country in two phases. In the first phase, 8 States will be covered. These States are Uttar Pradesh, Maharashtra, Tamil Nadu, Andhra Pradesh, Karnataka, Gujarat, Punjab and Haryana. Remaining States would be covered in the second phases.

GOVERNMENT OF INDIA
MINISTRY OF CONSUMER AFFAIRS
PUBLIC DISTRIBUTION

New Delhi-110001
Dated the 31st May, 2000

PRESS NOTE

Consequent upon the review of the earlier policy of making additional releases of free-sale sugar, the Government with effect from 1st January, 2000 have been making advance allotments of free sale sugar to the sugar factories which do not have cash credit limits sanctioned to them by the banks, sugar factories affected by natural calamities, sick sugar facatories having BIFR sanctioned revival schemes, as per the guidelines. The proceeds of such advance releases were to be utilized exclusively for the payment of cane price dues of the farmers.

2. In view of a large number of representations/requests received from the sugar mills and from various other quarters including the state Governments, the Government have further reviewed the policy of advance releases of free-sale sugar and have decided that in addition to the above category of sugar factories, the advance releases would also be made to the sugar factories which have cane price arrears to be paid and/or having

constraint of storage space etc. The guidelines for making advance releases for such category of sugar factories have also been prescribed and are as under :-

i) The entitlement of advance release of free sale quota for the sugar factories will not exceed 500 M.T. per months.

ii) The release of advance free sale quota to all the sugar factories including the incentive sugar factories would be subject to additional levy obligation of 5% of the advance free sale release made for the respective month.

iii) The advance free sale release under the above dispensation would be subject to the adjustment from the free sale quota of the factory on the basis of the All India Pro-rata releases. The adjustment of the advance free sale quota would be carried out normally during the same sugar season.

iv) The total advance freesale release to all the category of sugar factories put together in a month would not exceed 25000 M.T.

The eligibility of sugar factories for advance release of sugar would be determined by a Committee Chaired by Joint Secretary (Sugar) with Chief Director (Sugar) and Director (Sugar Control) as members.

Sd/
( R.P. SINGHAL )
CHIEF DIRECTOR (SUGAR)

Copy to the following with the request that wide publicity be given immediately to the aforesaid Press Note in the Press as well as on Radio/Television :-

1. Shri Harish Awasthi,
Director-General,
All India Radio,
Akashwani Bhavan,
New Delhi.

2. Mr. John Churchil,
Head of News, Doordarshan,
Doordarshan Kendra,
Khelgaon Road,
New Delhi.

3. Ms. Santha Balakrishnan,
Information Officer,
Press Information Officer,
Press Information Bureau,
Shastri Bhavan,
New Delhi.