The government on Monday asked sugar factories to sell seven million tonnes of sweetener in the open market between December and March.
The Food Ministry, which oversees the sugar sector, has allocated quota to mills for the next four months as against the practice of quarterly release. It has also not imposed any condition requiring mills to sell a minimum quantity every month out of the total quota.
“The Central Government has decided to make available quantity of 70 lakh tonnes of non-levy quota for open market sale, for the months of December, 2012 to March, 2013,” an official statement said.
The relaxation given to mills is seen in the context of the government moving towards removing controls on the sector.
The Rangarajan panel has suggested doing away with the regulated release mechanism and levy sugar system. The government is considering this report and has sought views of States in this regard.
Through regulated release mechanism, the Centre fixes sugar quota that every mills can sell in the open market (called non-levy sugar) as well as through ration shops (known as levy sugar).
In the levy sugar system, mills are required to contribute 10 per cent of their production to government at cheaper rates for running the ration shops.
India, the world’s second largest sugar producer, had produced 26 million tonnes of sugar in 2011-12 marketing year (October-September). In the ongoing 2012-13, the output is expected to decline to 23-24 million tonnes. The annual domestic demand is 22 million tonnes.