Govt likely to hike levy price of sugar by Rs 2/kg for this yr

Govt likely to hike levy price of sugar by Rs 2/kg for this yr
 The government is likely to raise
the levy price of sugar -- the rate at which it buys the
sweetener from mills to sell through ration shops -- by over
Rs 2 to about Rs 22 per kg for the current year.
For the 2011-12 marketing year (October-September), the
levy price of sugar was 19.04 per kg.
"We have proposed increasing levy price of sugar by over
Rs 2 from last year," a senior government official told PTI.
The proposal is under the consideration of the Finance
Ministry. The rise in levy price would entail additional
subsidy of Rs 400-500 crore, the official added.
The sugar sector is under government control. Sugar mills
are obliged to sell 10 per cent of their production to the
government to meet the demand of ration shops.
The levy price of sugar is calculated on the basis of
Fair and Remunerative Price (FRP), which stands at Rs 170 per
quintal for the 2012-13 marketing year.
The government buys at a below market price from sugar
mills and sells at a much cheaper rate of Rs 13.50 per kg
through ration shops. The government sells 2.7 million tonnes
(MT) of sugar every year to poor through ration shops.
The official said the levy price of sugar is increasing
every year but the retail price has been unchanged since 2002.
     The government has pegged sugar output for the current
year to be 23 MT, as against 26 MT last year. However, the
production is expected to be sufficient to meet domestic
demand of 21-22 MT.
The official said the government is expected to revise
the sugar output estimates after taking into account the
second advance estimate of sugarcane production in the next
month.