NEW DELHI, Sept 23: Concerned over high retail prices of sugar, an inter-ministerial group on inflation suggested that the food ministry should release more quantity in the open market and allocate the sweetener for six months instead of the present quota system of three months.
The members of the Inter Ministerial Group (IMG), headed by Chief Economic Advisor Raghuram Rajan, in its meeting earlier this month had agreed that the government should widen the regulated sugar release mechanism system to six months with higher allocation of 10 million tonnes for free sale, sources said.
Of late, the Food Ministry has been fixing the quota of non-levy sugar (meant for sale in the open market) on quarterly basis. In the first two quarters of this fiscal, it has allocated about nine million tonnes.
The sugar sector is controlled by the government. Under regulated release mechanism, the food ministry fixes the quantity of sugar that mills can sell in the open market as well as through public distribution system (PDS).
The IMG members expressed concerns over the near 20 per cent increase in retail prices of sugar in the domestic market in the last three months, while rates in the global markets were moderating, sources added.
Food Minister K V Thomas had told Parliament in its monsoon session that sugar prices remained stable up to June, 2012 but had started showing an upward trend from July, 2012 onwards.
The retail price of sugar was in the range of Rs 35-40 a kg during the last week of July, 2012 in the four metropolitan cities, the minister had said.
The country’s sugar production is estimated at 26 million tonnes in 2011-12 marketing year (October-September) against an annual demand of 22 million tonnes.
The IMG also discussed several issues to counter high food inflation in wheat, vegetables, edible oil, protein items, sugar and pulses, sources added. (PTI)
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