 "UP co-operative mills to supply PDS sugar")
The Centre has already done away with the sugar levy obligation on private sugar mills.
Under sugar levy, the millers had to compulsorily supply a part of total sugar production to government at discounted rates for subsidised PDS sugar. The sugar lobby had long been demanding to dismantle the system, as it adversely affected their profits.
More From This Section
Under the new system, the respective state governments have to procure PDS sugar from the open market through bidding.
The Centre would then compensate these states the difference between the sale price of PDS sugar (around Rs 13.50/kg) and the effective purchase price, subject to the ceiling of Rs 32/kg.
According to sources, UP would require about 33,000 tonnes of sugar every month for PDS.
There were about 23 operating cooperative sugar mills in UP and during 2012-13 crushing season these mills had produced nearly 5.74 lakh tonnes of the sweetener. All the mills, including cooperative and 100 odd private mills, had produced about 74.7 lakh tonnes of sugar this year.
Meanwhile, the bidding process would be undertaken by the UP Cooperative Sugar Mills Federation. Until then, the state would procure the requisite sugar from the cooperative mills.
“We would first like to study the process adopted in other states vis-à-vis PDS sugar procurement before we finalise our tendering process,” state food and civil supplies commissioner Archana Agarwal told Business Standard.
She informed that Delhi and Andhra Pradesh had resorted to short term tenders for the PDS sugar, while UP would prefer long term tender.
“The state wants to be sure of timely supplies for the PDS sugar and hence we have decided to buy from the cooperative mills rather than private units,” she added.