Government Fixes 21 LMT Monthly Sugar Quota For Sale In February 2019 Based On MIEQ Order Allocated 2018

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In a notification issued on 31st day of January 2019, the food ministry has allocated sugar quota for sale to each of 531 mills in the country.

The group sugar producing companies having more than one sugar producing units may maintain the stock as defined in Para (1) of this Order, either unit wise or for the group as a whole.

Besides, during the month of February, 2019 sugar mills having distilleries with ethanol production capacity which divert B – heavy molasses to produce ethanol and thereby sacrifice sugar, shall be eligible to sell additional quantity of sugar in addition to the quantity of white/refined sugar prescribed for domestic sale/dispatch as indicated in column 4 of the table. The additional quantity of sugar in lieu of production of ethanol from B-Heavy Molasses produced during the month of December 2018, shall be calculated as per the provisions contained in this regard in Sugarcane (Control) Order, 1966. The quantity of such diversion of sugar should be indicated in the P-II return for the month of February 2019.

As indicated in the stock holding limit order No. 5-1/2018 Sugar Control dated 31st October 2018, the sugar mills are required to export quantity of Minimum Indicative Export Quota (MIEQ) allocated to them for export during Sugar Season 2018-19. For this purpose, sugar mills are required to set their quarterly targets and intimate the same to DFPD. Further, if any sugar mill fails to intimate their quarterly exports target before the end of any quarter, the quarterly export quota will be deemed to be one-fourth of the total MIEQ of 2018-19 sugar season. The fulfillment of the quarterly export quota target, as the case may be, shall be monitored by DFPD based on actual export reported by the sugar mill through P-II return. In case, a sugar mill fails to achieve its quarterly sugar export target or deemed export target, the equivalent quantity of un-exported sugar during the said quarter shall be deducted in three installments from the quantity of sugar to be allocated to them in Column 4 of table of monthly stock holding limit order for each month in the subsequent quarter.

The mill wise maximum quantity of white/refined sugar for domestic sale and dispatch during the month of February 2019 as given in column 4 has been worked out on the following parameters:

  1. The February 2019 Stock holding limit has been allocated on the basis of giving equal weight, i.e. 50% each to total sugar production of sugar during the sugar season 2017-18 and the month-end notional stock for the month of January 2019.
  2. The notional month end stock for the month of January 2019 has been worked out on the basis of month end stock for December 2018 (as reported on P-II) adding expected production for January 2019 subtracting actual release for January 2019. For expected production of January, 2019 production for the corresponding period of January 2018 has been taken into account. In case sugar mill has not been operational during 2018, production for the month of December, 2018 has been factored in. Besides, the total exported quantity as reported in P-II has been added to December, 2018 month-end-stock.
  3. It may be recalled that, while working out the maximum quantity of sugar for sale in the domestic market during the month of January, 2018 the estimated production of sugar during the month of December, 2018 as reported by sugar mills was taken into account. However, based on actual production data for the month of December, 2018 now available on P-II, the same has been adjusted to arrive at the estimate allocation of the maximum quantity of white/refined sugar allowed to be sold to the sugar mills in the domestic market during the month of February, 2018.
  4. Show cause was issued to the sugar mills for violation of stock holding order for the month of October, 2018. Except 6 sugar mills, replies to SCNs have been received which are under examination. The excess quantity which have been sold by the said 6 sugar mills have been deducted from the proposed allocation in the month of February, 2019.
  5. As indicated in Para 8 of the notification, the sugar mills which have not fulfilled, their MIEQ obligation for the first quarter of the current sugar season 2018-19, the deductions have been made on account of non-export of sugar. Further, the sugar mills which have fully fulfilled their MIEQ obligation for the first quarter of the current sugar season 2018-19 have been incentivized by the allocation of 25% of the quantity deducted from the non-exporting sugar mills.

This allocation of deducted quantity to mills having fully exported their quarterly export quota has been done on the basis of their month-end December 2018 stock as reported on P-II. No deductions have been made against sugar mills which have exported partly against MIEQ. In case of sugar mills who have exported sugar during the first quarter MIEQ allotted to them for the year 2018-19, the deductions have been made in respect of mills which have failed to fulfill their MIEQ obligation.

The deductions and incentives taken into account while arriving at the figures given in column 4 of the table in the Order are indicated in the Annexure.

In the previous month the Govt. allocated quota to 537 mills in the country to sell 18.50 lakh MT. With higher quota compared to last month, supply in the market will increase which will be helpful for millers to clear cane arrears.

Link to February 2019 Monthly Sugar Quota, Govt. Notification

 

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