The Hindu Business Line : Centre fixes weekly free sale quota for sugar

Mills have been directed to report actual sale and dispatch of their sugar to the Directorate of Sugar within seven days of the end of the weeks concerned.

Our Bureau

New Delhi, Feb. 2

In a bid to curb volatility in domestic sugar prices, the Centre has set a weekly sub-quota within the 15.97 lakh tonnes (lt) free sale quota (FSQ) allocated to mills for selling in the open market this month.

Till now, mills were obliged to sell and dispatch their monthly FSQ on a fortnightly basis in two equal instalments. Thus, they would have had to dispose of 50 per cent of the 15.97 lt FSQ released for this month before February 14 and sell the balance 7.985 lt by the month-end.

But in a new measure aimed at ensuring uniform supplies to the market, the Centre has asked mills to liquidate the FSQ according to a weekly schedule. Thus, 20 per cent of the 15.97 lt FSQ would have to be sold between February 1 and February 7, 30 per cent between February 8 and February 14, and 25 per cent each between February 15 and February 21 and February 22-28, respectively.

Moreover, mills have been directed to report actual sale and dispatch of their sugar to the Directorate of Sugar within seven days of the end of the weeks concerned, i.e. by February 14, February 21, February 28 and March 7.

Only for Feb

“Any sugar mill which fails to report weekly quota of sale and dispatch of non-levy sugar within the prescribed time, will be deemed to have actually not sold and delivered the quantity as stipulated,” a Food Ministry release said here on Tuesday. A Ministry official told Business Line that the weekly FSQ schedule was applicable only for February as now, “but we may extend it for coming months as well”. He said that any quantity that remains unsold or un-dispatched according to the weekly schedule would automatically stand converted into levy sugar for the public distribution system.

“We have already converted 3.68 lt of such unsold, un-dispatched or even un-reported FSQ released for December 2009 into levy sugar,” the official informed, while warning mills that “we mean business”.

Our Chennai Bureau reports: Trade sources expressed concern over the conversion of quota that has been deemed unsold, undispatched or un-reported. “Some mills in the South had sent in their returns to the Ministry on utilising the free sale quota. Still, they have been slapped with a notice that their December quota has been converted into a levy,” the sources said.

“What will happen is that a fair amount sugar will tend to get locked by this order passed on January 28. If that happens, we will face a situation wherein prices in the open market could begin to soar,” they said.

Since January 28 when the FSQ for February was announced, sugar prices have increased by Rs 125-145 a quintal.

In Mumbai, medium sugar was quoted at Rs 4,090 on Tuesday against Rs 3,965 on January 28.

Small sugar was quoted at Rs 4,020 against Rs 3,875 during the same period.

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