Centre warns erring mills on sugar sales quota

The Food Ministry on Friday announced the allocation of 22 lakh tonnes (lt) of sugar quota for domestic sales during August. It is likely to be supplemented with about 2 lt of unsold quantity in July, taking the total availability to 24 lt next month, considered enough to meet the demand.

On the other hand, the Ministry has issued guidelines on sales asking mills to strictly adhere to the allotted quantity and not to sell more than that.

No benefit under any scheme, including export quota as and when issued, shall be granted to the group/individual sugar mill which violates the stockholding limits orders more than three times, for one year starting from the month of third instance, the Directorate of Sugar and Vegetable Oil said in a letter to all sugar mills. “This provision will be applicable from August 2024 onwards,” said Sangeet, director of Directorate of Sugar and Vegetable Oil, in the letter.

Decision in October?

The government is likely to take a decision on sugar export, which is allowed only through permits, in October based on the assessment of sugarcane crop and likely production of sugar.

To stabilise the prices of sugar prevailing in the domestic market to improve the financial health of the sugar mills and to enable them to pay the cane price arrears to the sugarcane growers, the Government had taken various measures including the imposition of stock holding limits on sugar mills on monthly basis, under the provisions of Sugar (Control) Order, 1966 and Essential Commodities Act, 1955, the letter said.

While analysing the data submitted by the mills in monthly returns on the NSWS portal and GSTR1 data during current sugar season ending September 30, it has been observed that some groups and individual sugar mills have not been maintaining the stock holding limit as specified quota issued by the Directorate, despite repeated directions, it said.

Checking violations

The decisions to debar mills from any export quota is one of a few steps the government has taken to check the violation as it leads to market distortions.

The ministry also has decided to continue the earlier decisions of deduction from eligible quantity of sugar quota for domestic sales against any mill selling more than the allotted quantity. This rule has been followed for the past few months, and as a result, quota of several big sugar companies got reduced.

Also it says that if any group/individual sugar mill dispatches less than 90 per cent of quota for a particular month without intimation till 20th day of the month, the release quota up to the extent of utilisation of quota in the reported month, shall only be allowed in the subsequent month.

The Directorate also said if any group/individual sugar mill violates the stock holding limit orders three times in a particular sugar season, the request of the group/individual sugar mill shall not be considered for any additional release even after the recommendations by the concerned Cane Commissioner of the State.