In keeping with its decision to raise levy supplies of sugar during the festival season, the government has set the levy quota for September at around 215,000 tonnes, up 16.2 per cent from 185,000 tonnes in August.
In its order dated August 21, the government said mills would have to sell levy sugar at prices provided in the sugar price determination order dated January 21.
The government has held a series of meetings with sugar industry representatives to raise levy supplies, which would help provide relief to the poor and also cool down prices of the sweetener in the open market, which have risen beyond Rs 30 a kg on high demand and shortage concerns.
It is mandatory for sugar mills to sell 10 per cent of their total output to the government’s fair price shops at subsidised rates. The government decides on the quantum of sugar to be sold by each mill every month to fair price shops, and the monthly quantum is usually referred to as the levy quota.
The sale price for the levy quota is currently around Rs 13 a kg, and has not been changed since 2002.
The government has been planning to double the levy quota to 20 per cent and raise the levy price to around Rs 20 a kg. Sugar mills have agreed to raise levy supplies, but have also been pushing for decontrol of the sector, asking the government to dismantle the monthly non-levy release mechanism.
Apart from dictating levy supplies, the government also controls the quantum of sugar each mill is allowed to sell in the open market in a month to regulate supplies and prices of the essential commodity.
A government official said the levy quota has been increased primarily to meet higher demand in the festival season, and the increase in the actual levy sale by mills to 20 per cent of output would come into effect only in the new season that starts October 1.
He said the matter has been referred to an empowered Group of Ministers, which will decide on the levy quota as well as price early next month.
Agriculture Minister Sharad Pawar had Friday said mills have agreed to increase levy supplies to around 3 million tonnes in the new season that starts October.
