New Delhi: India is likely to ease tight government controls on sugar sector as the outlook for domestic crop improves and prices fall, the Business Standard reported on Wednesday.
The newspaper said the move towards decontrol has received a strong push from the Commission for Agricultural Cost and Prices, a government panel.
Sugar is a sensitive issue in the world’s largest consuming country and the government regulates prices through periodic release of quota for sale in open market and public distribution.
To begin with, the government proposes to remove the release mechanism and withdraw mandatory norm for mills to supply to public distribution, the paper said.
“The time is ripe to go in for sugar decontrol, especially when India is expected to have surplus production of sugarcane and sugar in 2010/11 and 2011/12,” it said, quoting an unnamed source close to the development.
Improved outlook from Maharashtra and Uttar Pradesh, the top two sugar producing states, has eased domestic prices a third from early this year.
India’s sugar output in 2010/11 is expected to jump to 23-24 million tonnes from an estimated 18.5 million tonnes in the current year to September.