Indian mills produce raw sugar only for overseas refineries, which turn it into refined sugar.
The draft ‘Sugar (Control) Order, 2024’, issued by the consumer affairs, food and public distribution ministry, has cited technological advancements in the production process as the reason for amending the existing Sugar (Control) Order, 1966.
“Raw sugar sells at a much higher price than refined sugar and should be beneficial for the industry,” the official said on condition of anonymity, adding that the proposed draft would also be applicable to gur and khandsari.
Khandsari units with a capacity of more than 500 tonnes of cane crushed per day will fall under the proposed relaxation, leaving the small-scale units undisturbed, the official said.
At present khandsari units do not follow the fair and remunerative price (FRP) norms, nor are they allocated quota for sale of their products like sugar. “This distorts the sugar sector and pricing. Also, farmers lose out on the benefits of FRP,” the official said.The ministry has invited stakeholders’ comments on the draft by September 23.The proposed regulation gives the government the power to regulate the price of sugar. “The central government shall, at the time of issuing any order regarding price of sugar for sale… take into consideration the fair and remunerative price of sugarcane, approximate and average conversion cost for production of sugar from sugarcane/beetroot, average revenue realisation from by-products generated in the process of sugar production,” the draft states.
It also details the power of the government regarding inspection, entry, search, sampling and seizure in relation to sugar production.
The draft also specifies the Centre’s power to restrict sale, storage and disposal of sugar by producers and dealers.