Pawar talks to producers as sugar prices soar

With sugar prices in India are going through the roof, India's agriculture minister Sharad Pawar met sugar producers on Monday and said later that the government may reach an agreement with sugar mills to keep prices under control.

''The industry's attitude was quite constructive. They are ready to find some solution where we will be able to improve availability in the open market and in the public distribution system,'' he told reporters after the meeting in New Delhi. 

Among the steps contemplated, the centre is considering doubling the levy quota for sugar to 20 per cent of a mill's total output. Simultaneously, it could hike the price of levy sugar from Rs13 to Rs20. Levy sugar is supplied to the public distribution system for subsidised sale.

The agriculture minister said that he would carry forward the talks with the industry in the next two days. "We have decided to meet again. Then probably we will be able to reach some understanding," he said.

India is importing sugar for the first time in three years. Sugar prices have risen 62 per cent this year in Mumbai's Vashi, the largest wholesale market, while retail prices are at Rs33-35 a kg. The monsoon, which brings three-fourths of the nation's annual rains, may be the driest in 15 years, the India Meteoroligical Department said last week. 

Thailand, Asia's biggest sugar exporter, has sold 13,900 tonnes of white sugar to India for August shipment. "The sugar was sold through two international trading firms, Marubeni and Cargill," said a senior official at Thailand's Office of Cane and Sugar Board.