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Informist, Tuesday, Aug 27, 2024

 

By Pallavi Singhal

 

NEW DELHI – Ahead of the internal review of the recently issued draft amendment of Sugar (Control) Order 2024, industry representatives and experts have termed any further tightening of controls on the sugar sector as unjustified.

 

On Thursday, the Department of Food and Public Distribution issued a draft Sugar (Control) Order 2024, merging the Sugar Control Order 1966 and the Sugar Price Control Order 2018. The draft proposed amending the regulations regarding production, sales, storage, and pricing of sugar and other sugarcane by-products. The draft proposes to replace the existing Sugar (Control) Order, 1966.

 

While demanding an explanation of these norms, the industry is also questioning them. "When the 1966 order was brought in, it was introduced at a time when there was severe shortage of the commodity and the government needed immediate control. In today's day and age, when sugar production is in excess and quotas have to be brought in to regulate sugar prices so they do not crash, how can this be justified?" asked an industry expert, requesting anonymity.

 

On the clause that specifies the central government's regulation of the production of sugar and its byproducts, the industry has expressed concern. "With this, they do not only intend to bring in sugar under their regulation, but also products like jaggary and khandsari sugar, which were not under their control so far. We feel these micro-producers should be left free of government control," the expert said.

 

India extended the sugar export ban, first imposed in June 2022, indefinitely, to manage domestic prices amid expectations of a lower harvest. However, despite restrictions, sugar prices have remained high, with average retail prices up 4% on year at 45 rupees a kg as on Aug 26 and wholesale prices up 4.2% at 4,174 rupees per 100 kg, as per data by the consumer affairs ministry.

 

ETHANOL ANGLE

The 1966 sugar control order gave the government the power to regulate sales of sugar, but not on everything being produced from cane such as juice and molasses. "The draft order brings in all of these to prevent sugar from leaving the country in any form. This is primarily being seen by the industry as a move to achieve India's ethanol blending targets while ensuring ample sugar supply in the country," said a representative of a sugar body, on condition of anonymity.

 

But the industry expert questioned the intention, stating that of the industry's estimated sugar production of 33.3 mln tn for 2024-25, only about 4 mln tn has been diverted for ethanol so far. "There is no need to bring in so many controls on the entire industry when only about 13% of total production is going to ethanol," he said.

 

CLARITY EXPECTED

The National Federation of Cooperative Sugar Factories will spearhead an industry meeting on Sep 14 in Pune to review the recently issued draft amendment of Sugar (Control) Order 2024, Informist exclusively reported on Monday. "We will prepare a common draft after deliberating with all industry pan-India on Sep 14 in Pune," Prakash Naiknavare, the managing director of the federation, told Informist.

 

The federation will write to major industry association heads today about the September meeting, according to Naiknavare.

 

As per members who will participate, this will be a crucial exercise in deciphering the new order. "This will bring in more clarity as we go through the order clause by clause and understand issues from all sectors," said a senior official of a sugar company.

 

"What is missing is definitions of terms like B-heavy, C-heavy molasses, etc, which the government definitely needs to add to the order."  End

 

Edited by Avishek Dutta

 

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