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Centre takes steps to check sugar prices

By Our Special Correspondent

NEW DELHI, JAN. 6 . Alarmed at soaring sugar prices in parts of the country, the Centre today decided to release an additional free sale quota of four -lakh tonnes for sugar mills, taking the total free sale quota for the January-March quarter to a record 44.5--lakh tonnes.

The Government also warned the industry that if it did not release the free sale sugar or delayed it, their quotas would automatically accrue towards levy for distribution through the Targeted Public Distribution System.

Stockists and traders have also been warned against hoarding though there is no limit on stocks now. Market sentiment seems to have been influenced by the drought-induced estimated drop in the sugar output this year as well as a spurt in the futures trading in the commodity.

Addressing a press conference here today, the Union Minister for Food, Consumer Affairs and Agriculture, Sharad Pawar, said the Centre might resort to import of white sugar to control prices in the open market. "An unusual price rise of sugar is visible in the country. There is no need for it. Speculative forces are at work. We can go to the extent of importing sugar if the trading community does not cooperate,'' he said after he met the Prime Minister, Manmohan Singh.

Mr. Pawar said the Centre was closely monitoring the situation and would not allow prices beyond Rs. 20 a kg in the retail market.

The Government has decided to enhance the time limit for conversion of the raw sugar that is being imported under the Advance Licence Scheme from 24 months to 36 months. About 11-lakh tonnes of raw sugar has been imported so far and about six -lakh tonnes have been contracted. Mr. Pawar said the raw sugar could be allowed for domestic consumption, if need be.

Sugar output is expected to be 120-lakh tonnes this season and coupled with a carry-over stock of 85-lakh tonnes, the availability is 205-lakh tonnes against an annual demand of 180-lakh tonnes. This appears to have triggered speculation on availability and prices.

The Government did not want to interfere in the forward markets trade but the Regulator is said to have raised the trade margin on open position in sugar futures from 8.25 per cent to 33 per cent to curb speculation. This, coupled with enhancement of free sale quota, had already shown a declining trend in the prices today in Uttar Pradesh, Maharashtra and Gujarat.

However, there has been no perceptible change in Tamil Nadu, Andhra Pradesh and Karnataka, he said.

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