19 April, 2021

Degrees Of Sweetness

A bumper sugar year; the decontrol issue is revived

Tribhuvan Tiwari
Degrees Of Sweetness
outlookindia.com
-0001-11-30T00:00:00+05:53

Mapping Out Sugar Decontrol

Government plan

  • End current system of monthly quota of sugar release by mills
  • Entrust states with responsibility to procure “levy sugar" for PDS
  • Free farmers from selling cane only to designated mills
  • Ease export/import restrictions

Pitfalls

  • With no government control, mills can manipulate market price
  • Need a clear buffer stock policy, else government intervention will be limited
  • Farmers, cane output will remain vulnerable without clearer price policy

Potential Impact

  • Mills will benefit, particularly those investing in new technologies
  • Unless there is surplus, retail prices to be influenced by global trends
  • A clear Exim tariff policy will free mills, consumers from political whims
  • Without removing inter-crop price distortions, no...

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