New Delhi, Sep 13 (Inditop.com) Concerned over high prices of sugar, low supplies and fall in output because of drought, the government has asked soft drinks manufacturers and bulk users like Coca-Cola, Pepsi and Nestle to buy sugar overseas.
“We have told manufactures like Coca-Cola that you should findsome other mechanism,” said Minister of State for Agriculture, Consumer Affairs, Food and Public Distribution K.V. Thomas.
“These companies use large quantities of sugar. We have given this suggestion,” Thomas told Inditop, adding that the beverage manufacturers have been asked to respond within a fortnight to the government’s recommendation, sent a couple of days ago.
“They have to,” the minister categorically said when asked if the companies will follow the suggestions made by the government.
Apart from Coca-Cola and Pepsi, other large industrial consumers of sugar include Britannia, Dabur, Amul, Nestle and Cadbury.
India is the second largest producer of sugar in the world after Brazil. India is also the world’s largest consumer, with consumption estimated at 23 million tonnes per annum.
The low output has seen sugar prices double over the past year to Rs.35 a kilogram. In the world market, sugar prices are now at a 28-year high.
According to officials in Krishi Bhavan, the headquarters of the agriculture ministry, the move to ask beverage companies to import sugar was initiated after some states complained the firms were “hoarding” the commodity.
But these companies, which have asked the Confederation of Indian Industry to take up their case, denied the charge and said they just had legitimate stocks for ensuring smooth operations and within permissible limits.
From Sep 15, they can hold only 15 days’ stocks, ministry officials said.
With elections round the corner in three states and the festival season coming up, the government is keen to ensure the price of sugar does not rise further.
The authorities have already started importing sugar since India’s production is expected to have fallen to some 15 million tonnes during the current sugar year, which ends Sep 30, from 26.4 million in the previous year.
Ministry officials said the government has also extended its deadline for tax-free raw imports of raw sugar to December 2010, while refined white sugar can be imported up to a total of one million tonnes till March next year.
Thomas said that while the central government will make every effort to ensure that the people’s mood is not soured during the festive season, the states also had an important role to play.
“Actually, there is slight excess of sugar with states. There won’t be much of a problem if this can be properly managed by state governments.”
