Open market sugar prices fall below PDS rates
New Delhi: Sugar prices in the open market have fallen below prices quoting in PDS outlets.

In Maharashtra mills are currently getting Rs1,285-90 per quintal on sugar they are selling in the open market which is lower than the Rs1,338 per quintal being realised on the 10 per cent of sugar produce they are obliged to surrender as levy for the public distribution system (PDS).

In Uttar Pradesh, ex-factory prices have dropped from their June 2006 (pre-export ban) levels of Rs1,850 to around Rs1,380 per quintal. In the last two days sugar prices have seen a crash of Rs170. In Tamil Nadu, the decline has been from Rs1,800 to Rs1,400 per quintal, as buyers have virtually deserted the market and are backing out of previous deals.

The Food Ministry is proposing the creation of a 20-lakh tonne (lt) sugar buffer to bail out the ailing industry. The buffer would transfer the cost of interest, storage and insurance payable on the total sequestered quantity (20 lt) from the sugar mills to the Union Government's account.

The proposed buffer, which would be allocated among mills on a pro-rata basis linked to the stocks individually held by them, is to be created for a one-year period. During this period, the sequestered sugar would remain in factory godowns, with the carrying cost to be borne by the center.

In 2002 a similar buffer was created and was extended for an additional year till December 17, 2004. The the total expenses borne by the center at the time stood at over Rs760 crore. The proposal now is for Rs400 crore.

The largest impact the fall in sugar prices is on the farmer. Every one-rupee fall in sugar prices makes an average middle-class family that consumes, say five kg a month, richer by Rs60 for a whole year. But for a one-hectare farmer of Uttar Pradesh, who sells 50 tonnes of cane to mills, every rupee dip translates into an annual income loss of Rs5,000, assuming a 10 per cent sugar recovery figure.
Back to News Review index page  

Govt approves 10,000 tn of sugar export to EU
New Delhi: The government has allowed export of 10,000 tonnes of white sugar to the European Union (EU) under preferential quota, as supplies in domestic market have improved.

EU gives preferential market access to sugar from India up to a particular quantity.

The government has already allowed export of sugar but releases quotas in tranches as it wants to keep an eye on domestic prices despite improved production and decline in prices.
Back to News Review index page  

Govt approves uranium enrichment project
New Delhi: With the government giving over Rs13 crore to Andhra Pradesh for land acquisition, the uranium enrichment project aimed at meeting the uranium fuel requirements of the nuclear-power programme is expected to commence soon.

A meeting of the Cabinet Committee on Economic Affairs (CCEA) chaired by Prime Minister Manmohan Singh today gave its approval to deposit Rs13.7 crore for the land acquisition for the Tummalapalle Mining and Milling Project. The approval of the project will meet the uranium fuel requirement of the nuclear-power programme," Finance Minsiter P Chidambaram said.
Back to News Review index page  

Cabinet approves stake sale in 3 power companies
New Delhi: The Cabinet Committee on Economic Affairs (CCEA) has again started the disinvestment process and approved the initial public offer (IPO) of fresh shares in three public sector power utilities along with sale of five to 10 per cent Government existing equity.

The three companies are Rural Electric Corporation (REC), Power Grid Corporation of India (PGCIL) and National Hydroelectric Power Corporation (NHPC). The Government hopes to collect a total of about Rs4,381 crore through the exercise, said the Finance Minister, P. Chidambaram.

The IPOs are likely to hit the market during the first quarter of fiscal 2007-08 and PGCIL is likely to appoint the lead managers for its public issue by next week.

Chidambaram said the Left parties were consulted before taking the decisions.

He said the issue of 10 per cent fresh shares of REC is estimated to garner around Rs420 crore, 10 per cent fresh issue in PGCIL could mop up Rs971 crore and 10 per cent fresh share offering by NHPC could bring in another Rs1,490 crore taking the total amount received through issue of fresh shares to approximately Rs2,881 crore.
Back to News Review index page  

Govt to press ahead for more reforms
New Delhi: The government has said it would go ahead with its plan to expand its ambit of reforms in retail, despite objections raised by Congress President Sonia Gandhi in a letter written to the Prime Minister's Office (PMO) on 11 January.

The commerce ministry has also circulated a draft cabinet note to increase FDI up to 51 per cent in specific product categories like consumer electrical and electronic goods, sports goods and accessories.

Agency reports said the department of industrial policy and promotion had sent a clarification on Gandhi's letter which said that the government should study the impact of transnational super markets on the livelihood security of small scale operators before taking further decisions on FDI in retail.
Back to News Review index page  

Maharashtra asked to reduce size of Reliance SEZ
New Delhi: The Maharashtra government has been asked by the central government to reduce the size of the Reliance Industries-promoted Mahamumbai SEZ as it involves acquisition of over 10,000 hectares of land and displacement of a large number of people.

A spokesperson for the Reliance SEZ project denied receiving any communication from either the Centre or the state government on reduction in the size of the Mahamumbai SEZ.
Back to News Review index page