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September 4, 2009

Indian Government releases 20.45 lakh tonnes sugar for the month of September 2009

The Central Government has decided to release 20.45 lakh tonnes of sugar for the month of September 2009. The release includes normal quota of 14 lakh tonnes and dismantled buffer stock of 1.34 lakh tonnes. According to government, the quantity of 20.45 lakh tonnes is sufficient to meet the internal demand of sugar for the month of September 2009.

Sugar Quota Break-up (Figures are in lakh tonnes)

Levy Sugar:2.11
Non Levy Sugar:
a.Normal Quota:14.00
b.Dismantled Buffer Stock:1.34
c.Imported White Sugar out of Converted Raw Sugar:2.00
d.Expected Availability from Imported White/Refined Sugar:1.00

Total:20.45

The Central Government has also decided to introduce a system of fortnightly sale in respect of non-levy monthly sugar quota effective from September 09. Henceforth, sugar mills will be required to sell and dispatch their monthly non-levy quota on a fortnightly basis in two equal installments. The sugar mills would also be required to report actual sale and dispatch each fortnight, and this should reach the Directorate of Sugar within 7 days i.e. by 22nd of the month and 7th of the following month.

The Central Government has further decided to reduce the validity period of the release orders for white/refined sugar processed out of imported raw sugar released under accelerated release mechanism from 3 months to 1 month. Accordingly, the validity period of the August 2009 release order in respect of white/refined sugar processed out of imported raw sugar will stand reduced from the existing 31.10.2009 to 30.9.2009. Future releases of such sugar will also be issued with the validity period of 1 month. This has been done to bring in more sugars into the domestic market.

The Central Government had earlier put restriction on large consumers of sugar whose monthly consumption is more than 10 quintals from stocking sugar for more than 15 days. The above notification will come into effect after 21 days of its publication in the official Gazette i.e. on 12th September, 2009.

Sugar prices rose sharply today after the quota release. Spot prices of M Grade Sugar at Kolhapur touched Rs.3214.70 per quintal and S Grade Sugar at Vashi touched Rs.3225.90 per quintal. There seems to be no respite for the Indian consumers from the rising sugar prices. Sugar prices have almost doubled from the last year's prices as production fell sharply for 2008-09. Production for 2008-09 is estimated at around 140 to 150 lakh tonnes and for 2009-10 it is 150 to 160 lakh tonnes. India consumes around 230 lakh tonnes annually. That means, a shortage of around 60 to 70 lakh tonnes, which would be met from the buffer stocks and importing raw sugar from the global market. Indian government has extended the period for raw sugar import by the millers at zero duty till December 2010.

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