India to keep sugar controls for now - govt

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Fri, Jul 25 02:14 PM

NEW DELHI (Reuters) - India has no immediate plan to remove controls on the price and distribution of sugar, junior food minister Akhilesh Prasad Singh told reporters on Friday.

Currently sugar mills are forced to sell 10 percent of their output at cheap rates to the government for subsidised sales to the poor, and authorities decide how much of the remainder can be sold in the open market.

"There is no proposal to de-control the industry now," Singh told reporters, but added the food ministry had sought cabinet approval to lift controls on sugar.

Analysts say a record output of 28.4 million tonnes in the last crop year to September 2007 had helped the government move ahead with formulating ideas on the liberalisation of the sector.

But output is expected to drop to 26-27 million tonnes in the crop year to September 2008, and some analysts say India, the world's biggest consumer of sugar, may have to import by 2009/10.

India, which consumes about 22 million tonnes of sugar a year, is expected to export a record 4.2 million tonnes of the sweetner in the crop year to September 2008.

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