Govt withholds monthly sugar sale from 39 mills

The government has withheld permission to 39 sugar mills across the country to sell the monthly market quota due to various regulatory violations by them, a senior government official said.

"They have not been allowed to sell quota for various reasons. Primary among them is mis-declaration of stocks or not filing details of inventories," the official said.

There has also been a case of a mill selling sugar in excess of the quantity stipulated and also mills that have not made deliveries for levy sugar sale.

Since the sugar industry is under the partial control of the government, it stipulates the quantum each mill can sell in the market every month.

Also, around 10 per cent of the total sales, the levy sugar, is sold to government-run outlets at highly subsidised prices.

"The reason for monthly release of sugar is to ensure that it is available throughout the year at reasonable prices to consumers, while at the same time maintaining the price at a steady level helps the industry," the official said.

The official said selling excess sugar is violative of the Sugar Control Order of 1966, the official said.

Under clause 4 of the Order, no mill can sell, deliver, or dispose of sugar from bonded warehouses of the factory where it is produced, "except under and in accordance with a direction issued in writing by the central government."

Mills are also required to submit details of their inventory levels at the end of each sugar season that ends September 30 to enable a forecast of country's sugar availability.

The official said India's sugar output in 2006-07 (October-September) sugar season is expected between 22-23 mln tn compared with 19.3 mln tn produced last year.

The carry over stocks were at 3.9 mln tn as of October 1 and the inventories had declined to 2.6 mln tn, barely enough to meet consumption demand for 40-45 days, on November 1.