India mulls lifting sugar controls

Food minister K V Thomas will soon meet finance minister Pranab Mukherjee to discuss lifting of controls on sugar. The government will also look at allowing more exports of sugar, the minister said today.

The announcement comes a day after the industry lobbied for freeing the sector of government controls, in order to ensure availability of the sweetener at affordable prices.

The government indirectly controls sugar prices by fixing the price sugar mills pay cane farmers. The government also buys 10 per cent of sugar produced at mills, as levy sugar, at a discounted price.

The government also decides on the quota of sugar to be sold in the open market and imposes curbs on stocks that large buyers can hold. This, mills say, leads to a cycle of boom and scarcity.

They have now sought an additional export quota of 2 million tonnes of sugar by end-March.

The government has allowed exports of 1 million tonnes of sugar in the 2011-12 season.