Relief for millers: Bombay HC stays order on sugar stock ceiling

In September, the Central government issued a circular directing sugar millers to not hold more than 37 per cent stock of sugar by the end of September.

By: PARTHA SARATHI BISWAS | Pune | Published:October 25, 2016 10:03 am
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Sugar millers in Maharashtra heaved a sigh of relief as the Bombay High Court temporarily put a stay on action, by either the Central or state government, against millers who had failed to adhere to 24 per cent stock ceiling. The High Court issued the order on Monday while hearing the ongoing case filed by sugar millers against the stock limit. In September, the Central government issued a circular directing sugar millers to not hold more than 37 per cent stock of sugar by the end of September. The same would then be reduced to 24 per cent by the end of October, protesting which as many as 55 state mills moved the High Court.

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Surge in the price of sugar in the retail market had prompted the Central government to take the decision.

Vice-President of Maharashtra State Cooperative Sugar Factories Federation, Jaiprakash Dandegaonkar, confirmed the order saying, “The court had directed both the Central and state government not to take action against millers who have failed to adhere to the stock limit.” “The High Court has fixed November 17 as the next date for hearing,” he added.

Earlier, the HC had refused to put a blanket stay on the ceiling.

While no action was taken against the mills who had failed to adhere to the ceiling, around 28 mills were issued notices by the department of civil supplies. Due to its higher production, mills in Maharashtra had a higher stock of sugar as compared to those in Uttar Pradesh or Karnataka.

Good price realisation in the domestic market has made millers cautious about releasing their stock. Besides, a lean upcoming season had bouyed their hopes of better price realisation in the future. Currently, around 32-40 mills in the state have more stock than the allowed limit. Sanjiv Babar, managing director of the federation, said millers might have to sell eight to nine lakh tonnes of sugar to meet the limits set by the government which may soon ease out sugar prices in the retail market.