The Hindu Business Line : Raw sugar imports: Mills to get levy obligation waiver

THE Government has decided to allow export of white sugar against the raw sugar imported this year under the advance licence scheme. With a view to bailing out the sugar mills that have been facing shortage of sugarcane, the Government has also waived the 10 per cent levy obligation on imported raw sugar.

"I have decided that release orders be given to those factories which have imported raw sugar under advance licence and have export obligation to fulfil," the Agriculture, Consumer Affairs, Food and Public Distribution Minister, Mr Sharad Pawar, told the annual general body meeting of the National Federation of Cooperative Sugar Factories here on Sunday.

He said after carefully considering the question of the levy obligation on import of raw sugar under advance licence, the Government has decided to exempt them from the 10 per cent levy obligation.

He however, said that the concessions on raw imported sugar given to mills this year would be discontinued and the old stipulations would apply for the next year's contracts, if any.

He said due to the problems faced by the sugar industry last year, the Government had permitted import of raw sugar on a "tonne-to-tonne" basis to allow more time for fulfilling the export obligations and to use the imported raw sugar for domestic purposes.

However, following expectations of about 180 lakh tonnes of sugar production during 2005-06, as against 130 lakh tonnes during 2004-05, the Government has decided to revert to the old condition of "grain-to-grain" exports against raw sugar import to prevent it from being used in the domestic market.

"The sugar production prospects appear bright for the next season (2005-06) and substantial raw sugar imports have already come in. Therefore, I do not see the necessity for maintaining "tonne-to-tonne" basis for imports under advance licences," Mr Pawar said.

The export obligation will be on "grain-to-grain" basis for such imports under the advance licence from October 1.

The Minister said he was personally not in favour of dismantling the free sale sugar mechanism from October 1, and stated that it should be allowed to continue for at least one more year till the prices settle at around Rs 1,600 per quintal.

He, however, said it was for the cooperatives to decide and he could hold a meeting in this regard whenever they wanted.

On the issue of revision of levy sugar price, he said the report of the Cost Accounts Branch of the Finance Ministry in this matter is being examined and a decision will be taken shortly.

He said the report has also given suggestion on revising the transport charges for delivery of sugar into railway wagons and a decision will be taken soon.

Mr Pawar said the Prime Minister was scheduled to hold a meeting on Monday to decide on the rescheduling and reduction of loans for the sugar industry by Nabard.

The reduction in the interest is expected to cost the cooperative financial institutions Rs 250 crore, according to officials. The matter would then be taken to the Cabinet for necessary approvals, he said.

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Raw sugar imports: Mills to get levy obligation waiver