Date:13/01/2007 URL: http://www.thehindubusinessline.com/2007/01/13/stories/2007011301860700.htm

Back Move to help mills tide over current crisis

Our Bureau

Coimbatore , Jan. 12

Piling stock, bumper crop and declining price levels had been worrying the Indian sugar mills due to ban on sugar exports.

The Cabinet's decision on Thursday night to scrap the ban is now expected to bail out the industry from the crisis it was facing.

While industry captains have been voicing fears about a cash-crunch situation due to the export ban, cane growers' woes were no less.

Reacting to the announcement, Mr M. Manickam, President of the South Indian Sugar Mills Association, said he hoped the Government would not use sugar for controlling the consumer price index again.

The Government had, in July last, banned sugar exports to check spurt in domestic prices.

Later towards the end of 2006, the Government lifted the ban partially to permit companies that had imported raw sugar in 2005 to export, without paying duty by procuring advance licence.

On the stock position, Mr Manickam said: "It is strange that the closing stock for 2005-06 was considered inadequate and the same as the opening stock for 2006-07, considered adequate for lifting the export ban."

Production estimates show that the country is poised for a bumper crop for the season ending September 2007, up from 19.3 million tonnes last season to over 22 mt.

Mr Manickam stressed the need for more transparency in policy-making and economic knowledge in decision-making.