ISSN (Print) - 0012-9976 | ISSN (Online) - 2349-8846

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Mahindra Makes Up for Recession

THE president of the Indian Sugar Mills' Association has listed the usual catalogue of the industry's demands on Government. The industry would like to have priority status for tax purposes, partial decontrol of molasses prices, longer validity period for free sale of sugar, and a high enough price that would be remunerative to uneconomic units. And it wants permission to shift factories to better sites. All this in a year which should end with record profits, despite an output which is only two-thirds of the 1965-66 peak when production was 33 lakh tonnes The economics of this transformation in profitability is interesting. Free sale of 40 per cent of output has made an impact on all aspects of sugar production. Government had fixed the price of sugarcane at Rs 7.37 per quintal, but this became immediately irrelevant (even otherwise, with gur selling at Rs 3 to Rs 3.50 per kg, the official price would have ensured only a trickle of sugarcane to the factories), because, with its hands only partially tied, the industry was able to compete freely for its sugarcane. Shri V D Jhunjhunwala refers to prices of Rs 15 to R, 17 per quintal paid for sugarcane; this, however, is to argue from exceptions (incidentally Rs 17 comes very near to the controlled price of Rs 170 per quintal for sugar, requiring 10 per cent recovery). The more general price paid appears to have been Rs 11 to Rs 12. with possibly higher price, for marginal supplies. Industry, nevertheless, got much higher supplies of sugarcane than last year. Sugar output for the 1967-68 season is now estimated at about 22.5 lakh tonnes, one lakh tonnes more than the previous year's.

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