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DIRECTORATE OF SUGAR & VEGETABLE OILS

ABOUT US

The Directorate of Sugar & Vegetable Oils is an attached office of the Department of Food & Public Distribution and responsible for implementation of policies regarding production, distribution and consumption of sugar including policy matters relating to sugar and sugarcane sector, fixation of Fair & Remunerative Price (FRP) of sugar cane payable by sugar factories to the sugarcane growers, development and regulation of sugar industry (including training in the field of sugar technology) and supply of sugar under public distribution system (PDS). This Directorate also assists the Department in the management of edible oils sector, particularly relating to the availability and monitoring of prices.

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(A) SUGAR DIVISION

There are 723 installed sugar factories in the country as on 31.12.2016, with sufficient crushing capacity to produce around 334 lakh MT of sugar. The capacity is roughly distributed equally between private sector units and co-operative sector units. The capacity of sugar mills is, by and large, in the range of 2500 TCD-5000 TCD bracket but increasingly expanding and going even beyond 10000 TCD. Two standalone refineries have also been established in the country in the coastal belt of Gujarat and West Bengal which produce refined sugar mainly from imported raw sugar as also from indigenously produced raw sugar. The sector-wise break-up of sugar mills in the country is as given below :-

Sl. No. Sector Number of factories
1. Co-operative 328
2. Private 352
3. Public 43
Total 723*
*Includes each refinery in West Bengal & Gujarat.

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Cane Price Arrears

The payment to sugarcane farmers by sugar mills, though statutorily supported by various statutes and enforced by State Governments, get affected by the dynamics of domestic market price as well as international situation related to export possibilities. Despite, the sugar production in the country being more than domestic requirements for the last five sugar seasons and also expected to be sufficient to meet domestic requirements during 2015-16 sugar season. Due to surplus sugar production, the prices of sugar had been subdued in the domestic market, adversely affecting the liquidity of the sugar mills and their ability to pay the cane dues to the sugarcane farmers in time. Consequently, the Government has implemented various schemes to increase the liquidity of the sugar mills so that the cane price arrears could be kept to a minimum during these seasons. The position of cane price payments and arrears for the past few sugar seasons, on a similar cut-off date, was as under :-

(In crores )
SEASON POSITION AS ON TOTAL PRICE PAYABLE TOTAL PRICE PAID ARREARSINCLUDING SAP % OF ARREARS ON PRICE PAYABLE
2016-17 31/01/2017 33,162.48 23,759.76 9,402.72 28.35
2015-16 31/01/2016 13,878.32 8,431.20 5,447.12 39.25
2014-15 31/01/2015 28,635.37 16,350.78 12,284.59 42.90
2013-14 31/01/2014 26,364.37 14,115.43 12,248.94 46.46
2012-13 31/01/2013 31,214.75 21,061.81 10,152.94 32.53
2011-12 31/01/2012 25,166.57 18,618.17 6,548.39 26.02

The new system for distribution of sugar in the PDS

The Central Government has decontrolled the sugar sector partially by removing the levy obligation on sugar mills and doing away with the regulated release mechanism on open market sale of sugar. Prior to it, sugar mills were mandated to supply 10% of their production to meet the Public Distribution System (PDS) demand. Sugar mills are now free to sell their entire production as per their commercial prudence. However, under the new dispensation, to make sugar available in the PDS at the existing retail issue price of Rs. 13.50 per kg, the State Government/UT administrations are required to procure it from the open market through a transparent system. The Central Government is reimbursing the States/ UTs. @ Rs. 18.50 per kg, limited to the quantity based on their existing allocations. Subsequently, the Central Government has given liberty to the States/UTs to either absorb the additional cost, if any, on account of handling, transportation and dealer’s commission or pass it on to consumers by including it in the Retail Issue Price. Further, with a view to ease out the financial burden of the State Governments, the Government is providing advance subsidy to all State Governments who approach the Central Government for the same. The new system of open market procurement of sugar has been adopted by 30 States/UTs from June, 2013 onwards. An amount of Rs. 4500 crores has been released to the States/UTs. during 2015-16, and Rs. 3486.07 crores (upto 31-01-2017) has also been released during the current Financial Year 2016-17.

PRODUCTION, CONSUMPTION AND STOCKS OF SUGAR

Production of Sugar

Sugar production in India has been cyclic in nature. Every 2-3 years of high sugar production are followed by 2-3 years of low sugar production. From the sugar season 2010-11 onwards, the production of sugar has been surplus over the domestic requirements in the country. As such, it appears that the cyclicity in sugar production has reduced. Season - wise production of sugar from 2011-12 onwards is given below :-

Sugar Season(October-September) Production of Sugar (Qty. in lakh tonnes)
2011-12 263.43
2012-13 251.83*
2013-14 245.54
2014-15 284.63
2015-16(Provisional) 251.21
2016-17(Estimated) 225.00
* - Excludes 6.76 lac tonnes of white sugar produced from imported raw sugar.

CLOSING STOCKS OF SUGAR

The closing stocks of sugar at the end of each sugar season from 2011-12 to 2016-17 are given below :-

(Qty. in lakh tonnes)
Sugar Season Closing Stock
2011-12 66.96
2012-13 91.09
2013-14 72.13*
2014-15 90.00
2015-16(P) 77.10
2016-17(E) 47.10
* excludes about 0.60 lakh tons of unmarketable BISS/Brown sugar.

(P) – Provisional.

(E) - Estimated and under revision.

The details of estimated carry-over stocks, production, imports, availability, estimated internal consumption, closing stocks for the last five seasons are as under :-

Sugar Balance Sheet since 2012-13 Sugar Season onwards.

( Qty. in Lac tons )
Particulars 2012-13 2013-14 2014-15 2015-16(P) 2016-17(E)
Opening Stock 66.01 91.09 72.13 90.59* 77.10
Production of Sugar 258.58# 245.54 284.63 251.21 225.00
Imports - 1.05 - - -
Total availability 324.59 337.68 356.76 341.80 302.10
Total releases/ dispatches for consumption 230.00 243.00 255.00 248.00 255.00
Exports 3.50 22.55 12.00 16.70 -
Total releases/ Dispatches 233.50 265.55 267.00 264.70 255.00
Closing stocks 91.09 72.13 89.76 77.10 47.10
( P ) - Provisional.

( E ) – Estimated and under revision.

# This includes 251.83 Lac M.T White Sugar and 6.75 Lac MT White Sugar produced from imported Raw Sugar.* This includes 0.83 lakh MT of BISS/Brown sugar in the stocks

Ex-mill & Retail Prices of Sugar

The range of price of sugar (S-30 Grade) in the major centres of the country during sugar season 2010-11 to 2016-17 (upto December, 2016), was as under :-

Sugar Season( October - September) *Range of Ex-mill Prices(Rs. per quintal) **Range of retail prices(Rs. per kg.)
2010-11 2350-3090 28.00-34.00
2011-12 2540-3735 31.17-43.70
2012-13 2810-3685 32.74-41.00
2013-14 2420-3300 31.00-36.00
2014-15 2050-2860 29.35-35.87
2015-16 2555-3456 30.55-40.51
2016-17 3250-3700 41.00-43.00
Source: * Daily Trade Mart Enquiry, Directorate of Sugar and Vegetable Oils.

** Price Monitoring Cell, Department of Consumer Affairs

EXPORT OF SUGAR

Till 15.01.1997, the exports of sugar were being carried out under the provisions of the Sugar Export Promotion Act, 1958, through the notified export agencies, viz. Indian Sugar & General Industry Export Import Corporation Ltd. (ISGIEIC) and State Trading Corporation of India Ltd. (STC). Through an Ordinance, the Sugar Export Promotion Act, 1958, was repealed w.e.f. 15th January, 1997 and thus the export of sugar was de-canalized. Under de-canalized regime, the export of sugar was being carried out through the Agricultural and Processed Food Products Export Development Authority (APEDA), under Ministry of Commerce. Thereafter, the sugar export was undertaken by the various sugar mills/merchant exporters, after obtaining the export release orders from the Directorate of Sugar. During the surplus phase of 2006-07 and 2007-08 sugar seasons, the sugar exports were permitted without release orders vide notification dated 31.07.2007. Subsequently, the necessity of obtaining release orders was reintroduced from 01.01.2009, as country entered the down swing phase of sugar production. During 2010-11 & 2011-12 sugar seasons (till May, 2012), in view of the surplus over domestic consumption, exports of sugar were permitted under OGL at the strength of release orders. Thereafter, the Government vide Notification No. 1059(E) dated 11.05.2012 has again dispensed with the requirement of export release orders. The export of sugar is now free without any restriction. Further, the sugar production during 2015-16 and 2016-17 has been estimated to low and Government, in order to discourage Export, imposed export duty of 20% vide notification dated 16-06-2016.

IMPORT OF SUGAR

Import of sugar, which was placed under Open General License (OGL) with zero duty in March 1994, continued with zero duty upto 27.04.1998. The Government imposed a basic customs duty of 5% and a countervailing duty of Rs.850.00 per tonne on imported sugar with effect from 28.4.1998. The basic custom duty was increased from 5% to 20% w.e.f. 14.1.1999 in addition to the countervailing duty. In the Union Budget for the year 1999-2000, duty on imported sugar was further increased from 20% to 25% with surcharge of 10%. The customs duty on imports of sugar was again increased to 40% on 30.12.1999 and 60% on 9.2.2000 along with continuance of countervailing duty of Rs.950/- per ton ( w.e.f. 01.3.2008) plus 3% education cess. Sugar production in the sugar season 2008-09 has declined and in order to augment the domestic stock of sugar, the Central Government allowed import of raw sugar under Advance Authorization Scheme by sugar mills at zero duty from 17.02.2009 upto 30.09.2009 and import of raw sugar at zero duty under Open General License (OGL) w.e.f. 17.04.2009 which was continued till 30.06.2012. Thereafter, a moderate duty of 10% was re-imposed w.e.f. 13.07.2012 which was increased to 15% w.e.f. 08.07.2013 and subsequently 15% to 25% as on 20.08.2014. The import duty was further increased from 25% to 40% with effect from 30.04.2015. Thereafter, there has been hardly any import of sugar under OGL. As per information published by DGCIS, Kolkata, the export/import of sugar from sugar season 2009-10 to 2015-16 is given below :-

Export of Sugar
Sugar Season(Oct-Sept) Quantity ( in lakh M.Ts) *
2009-10 2.371
2010-11 28.14
2011-12 36.74
2012-13 12.02
2013-14 26.85
2014-15 24.32
2015-16 37.98

Import of Sugar
Sugar Season Quantity ( in lakh M.Ts) *
2009-10 41.80
2010-11 3.65
2011-12 1.886
2012-13 17.12
2013-14 10.788
2014-15 12.82
2015-16 19.06
* Includes quantity under Advanced Authorisation Scheme.

PRODUCTION SUBSIDY ON CANE CRUSHED

The Government vide Notification dated 02.12.2015 ( subsequently re-notified on 12.09.2016) provided subsidy @ Rs. 4.50 per quintal on cane crushed during 2015-16 sugar season to offset the cost of cane.

Subsidy is provided to sugar mills contingent upon their achievement in respect of targeted export of sugar and in case those mills have ethanol production capacity, also on achieving targeted supply of ethanol to Oil Marketing Companies (OMC) under Ethanol Blending Programme (EBP). As on 31.01.2017, production subsidy of Rs. 317.02 crores has been provided to the sugarcane farmers directly on behalf of the sugar mill or to the mills wherever applicable.

DEVELOPMENT COUNCIL FOR SUGAR INDUSTRY

Bureau of Indian Standard (BIS) is responsible for declaring year wise Reference Standards of sugar sample visual comparisons. The samples are recommended by a committee under the Chairmanship of Director, NSI Kanpur.

A Sub-Committee constituted under Sugar Development Fund (SDF) vide Gazettee Notification dated 13.01.2016 examines the research projects proposal received from the sugar factories, Scientific Organizations and other concerned organizations for recommending sanction of grant-in-aid for conducting research activities relating to the sugar industry, monitoring the progress made in regard to approved research work and all other related matter.

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E-GOVERNANCE INITIATIVES

In order to improve and systemize the data management system in sugar sector, the Directorate of Sugar under Department of Food and Public Distribution has developed a web based platform (esugar.nic.in/sugar_pII ) for online submission of inputs by sugar mills on monthly basis. This has helped the Government to take prompt and informed policy decisions for better management of sugar sector. The new system also provides transparency in the data management of the sugar mills as well as Government’s working. The portal also provides window for online connectivity with the State Governments for getting inputs regarding production, stocks utilization of levy sugar for PDS, cane price arrears of sugar mills on fortnightly basis etc.

(B) OIL DIVISION


About Us

It seeks to coordinate management of edible oils in the country through a multi-pronged strategy, namely, (i) assessment of the domestic demand for edible oils and its availability from domestic sources. Mismatch of demand and supply is met through import of edible oils so as to maintain their prices at reasonable level; (ii) It also closely monitors prices of edible oils both in the domestic and in the international market and initiate necessary policy measures whenever necessary. The Division compiles the production of edible oil on the basis of online submission of data by vegetable oil industries registered with the Directorate. The monthly production data of edible oils is transmitted to M/o Statistics & PI for compilation of monthly Index of Industrial Production(IIP) which is released on 12th of every month. The Division is staffed with qualified technical people who assist the Ministry in the coordinated management of Vegetable Oils particularly relating to production/availability and monitoring of prices.

Edible Oil Scenario

Importance of Edible Oils in the Country’s Economy

Oilseeds and edible oils are two of the most sensitive essential commodities. India is one of the largest producer of oilseeds in the world and this sector occupies an important position in the agricultural economy, accounting for the estimated production of 33.59 million tons of nine cultivated oilseeds during the year 2016-17 (November-October) as per 2nd Advance Estimates released by the Ministry of Agriculture on 15.02.2017. India contributes about 6-7% of the world oilseeds production. Export of oil meals, oilseeds and minor oils was about 3.18 million tons in the financial year 2015-16 valued at Rs 12298.78 crores

Types of Oils commonly in use in India

India is fortunate in having a wide range of oilseeds crops grown in its different agro climatic zones. Groundnut, mustard/rapeseed, sesame, safflower, linseed, nigerseed/castor are the major traditionally cultivated oilseeds. Soyabean and sunflower have also assumed importance in recent years. Coconut is most important amongst the plantation crops. Efforts are being made to grow oil palm in Andhra Pradesh, Karnataka, Tamil Nadu and North- Eastern parts of the country in addition to Kerala and Andaman & Nicobar Islands. Among the non-conventional oils, rice bran oil and cottonseed oil are the most important. In addition, oilseeds of tree and forest origin, which grow mostly in tribal inhabited areas, are also a significant source of oils. Figures pertaining to estimated production of major cultivated oilseeds, availability of edible oils from all domestic sources (from Domestic and Import Sources) during the last ten years are as under : -

( in lakh Tons)
Oil Year (Nov.- Oct.) Production of Oilseeds* Net availability of edible oils from all domestic sources Imports** Total Availability of Edible Oils
2006-2007 242.89 73.70 46.05 119.75
2007-2008 297.55 86.54 54.34 140.88
2008-2009 277.19 84.56 74.98 159.54
2009-2010 248.83 79.46 74.64 154.10
2010-2011 324.79 97.82 72.42 170.24
2011-2012 297.98 89.57 99.43 189.00
2012-2013 309.43 92.19 106.05 198.24
2013-2014 328.79 100.80 109.76 210.56
2014-2015 266.75 89.78 127.31 217.09
2015-16 252.50 86.30 148.50 234.80
Source : * As per Final Estimates (dated 15.02.2017) released by Ministry of Agriculture.

** DGCIS

Consumption Pattern of Edible Oils in India

India is a vast country and inhabitants of several of its regions have developed specific preference for certain oils largely depending upon the oils available in the region. For example, people in the South and West prefer groundnut oil while those in the East and North use mustard/rapeseed oil. Likewise several pockets in the South have a preference for coconut and sesame oil. Inhabitants of northern plain are basically consumers of fats and therefore prefer Vanaspati, a term used to denote a partially hydrogenated edible oil mixture of oils like soyabean, sunflower, rice bran and cottonseed and oils. Many new oils from oilseeds of tree and forest origin have found their way to the edible pool largely through vanaspati route. Of late, things have changed. Through modern technological means such as physical refining, bleaching and de-odorization, all oils have been rendered practically colourless, odourless and tasteless and, therefore, have become easily interchangeable in the kitchen. Oils such as soyabean cottonseed, sunflower, ricebran, palm oil and its liquid fraction- palmolein which were earlier not known have now entered the kitchen. The share of raw oil, refined oil and vanaspati in the total edible oil market is estimated roughly at 35%, 60% and 5% respectively. About 60% of domestic demand of edible oils is met through imports out of which palm oil/palmolein constitutes about 80%. The consumption of refined palmolein (RBD palmolein) as well as its blending with other oils has increased substantially over the years and is used extensively in hotels, restaurants and in preparation of wide varieties of food products.

Major Features of Edible Oil Economy.

There are two major features, which have significantly contributed to the development of this sector. One was the setting up of the Technology Mission on Oilseeds in 1986 which has been converted into a National Mission on Oilseeds and Oil Palm (NMOOP) in 2014. This gave a thrust to Government's efforts for augmenting the production of oilseeds. This is evident by the very impressive increase in the production of oilseeds from about 11.3 million tonnes in 1986-87 to 25.25 million tons in 2015-16. Most of the oilseeds are cultivated on marginal land and are dependent on rainfall and other climatic conditions. The other dominant feature which has had significant impact on the present status of edible oilseeds/oil industry has been the program of liberalization under which the Government's economic policy allowing greater freedom to the open market and encourages healthy competition and self regulation rather than protection and control. Controls and regulations have been relaxed resulting in a highly competitive market dominated by both domestic and multinational players.

Export Import Policy on Edible Oils

In order to harmonize the interests of farmers, processors and consumers and at the same time, regulate large import of edible oils to the extent possible, import duty structure on edible oils is reviewed from time to time. Current import duties on crude and refined edible oils are 12.5% and 20% respectively with effect from 23.09.2016 , the import duty on crude palm oil was reduced from 12.5 % to 7.5 % and import duty on RBD Palmolin was reduced from 20% to 15%.Import duty on all other crude and refined oils was kept at 12.5% and 20% respectively.

Export of edible oils had been banned w.e.f. 17.03.2008. However, w.e.f. 05.02.2013, castor oil, coconut oil from Electronic Data Interchange (EDI) ports and through notified Land Custom Stations, edible oils produced from minor forest produce and organic edible oils have been exempted from the prohibition on export of edible oils. Export of edible oils has been permitted in branded consumer packs of upto 5 kg, subject to a minimum Export Price of USD 900 per MT w.e.f. 06.02.2015. Export of Rice Bran Oil in bulk has been exempted from the ban w.e.f. 06.08.2015 ,while Groundnut oil ,Sesame oil,Soyabean oil and maize oil have been exempted from the ban w.e.f 27.03.2017

Historical pattern of import duties on the major edible oils of vegetable origin

Name of Oil Rates of Import Duty / Effective Dates
Crude Palm Oil 70 % (11/08/06) 60% (24/01/07) 50% (13/04/07) 45% (23/07/07) 20% (21/03/08) 0%(01/04/08) 0% (17/03/12) 2.5% (23/01/13) 2.5%(23/01/13) 7.5%(24/12/14) 12.5%(17/09/15) 7.5%(23/09/16)
RBD Palmolein 80 % (11/08/06) 67.5% (24/01/07) 57.5% (13/04/07) 52.5% (23/07/07) 27.5% (21/03/08) 7.5 (01/04/08) 7.5 % (17/03/12) 7.5 % (17/03/12) 10%(20/01/14) 15%(24/12/14) 20%(17/09/15) 15%(23/09/16)
Crude Soyabean Oil 40% (23/07/07) 0%(01/04/08) 20% (18/11/08) 0% (24/03/09) 0% 0% 0% (17/03/12) 2.5% (23/01/13) 2.5%(23/01/13) 7.5%(24/12/14) 12.5%(17/09/15)
Refined Soyabean Oil 40% (23/07/07) 7.5 % (01/04/08) 7.5 % (18/11/08) 7.5 % (24/03/09) 7.5 % 7.5 % 7.5 % (17/03/12) 7.5 % (17/03/12) 10%(20/01/2014) 15%(24/12/14) 20% (17/09/15)
Crude Sunflower Oil 65% (24/01/07) 50% (01/03/07) 40% (23/07/07) 20% (21/03/08) 0% (01/04/08) 0% (24/03/09) 0% (17/03/12) 2.5% (23/01/13) 2.5%(23/01/13) 7.5%(24/12/14) 12.5%((17/09/15)
Refined Sunflower Oil 75% (24/01/07) 60% (01/03/07) 50% (23/07/07) 27.5% (21/03/08) 7.5 % (01/04/08) 7.5 % (24/03/09) 7.5 % (17/03/12) 7.5 % (17/03/12) 10%(20/01/2014) 15%(24/12/14) 20%(17/09/15)

Major recent decisions in respect of edible oils during 2014-15

1. Vide Notification No. 43/2015-20 dated 27th March, 2017 ,Groundnut oil ,Sesame oil,Soyabean oil and Maize oil have been exempted from the ban on export of edible oils.

2. Vide Notification No. 51/2016-Customs dated 23rd September, 2016, the import duty on crude palm oil was reduced from 12.5% to 7.5% while for other crude oils it was kept at 12.5%. Import duty on refined edible oils has been decreased from 20.0% to 15.0%. Import duty on all other crude and refined oils was kept at 12.5% and 20% reespectively.
3. With the implementation of FSSAI Act, 2006 w.e.f. 5th August, 2011, the edible oil industries is now governed by FSSAI for issue of license, safety and standard parameters. However, the data monitoring of procurement for the edible oil industries are being administered by the Directorate under Vegetable Oil Products, Production and Availability (VOPPA)(Regulation) Order, 2011.

E-GOVERNANCE INITIATIVES

In order to improve and systemize the data management system in the vegetable oil sector, the Directorate of Sugar & Vegetable Oils under Department of Food and Public Distribution has developed a web based platform (evegoils.nic.in) for online submission of inputs by vegetable oil producers on monthly basis. This has helped the Government to take prompt and informed policy decisions for better management of vegetable oil sector. The new system also provides transparency in the data management of the vegetable oil industry as well as Government’s working. The portal also provides window for online registration and submission of monthly production returns.

Status of the Vegetable Oil Industry (as on 13.04.2017)

1. Vegetable Oil Industries registered under VOPPA(R) Order, 2011, with the Directorate

Type of Industry No. of Units Registered
1. Vanaspati, Interestified Vegetable Fats 100
2. Refinery along with Solvent plant & Oil Mills. 205
3. Oil Mill & Blended Edible Vegetable Oil. 164
4. Solvent Extraction Units 123
Total 592
2. Annual Capacity of Different Vegetable Oil Manufacturing Plants
Name of Plant Annual Capacity(Lakh MT)
1. Oil Mill expeller 58.6
2. Solvent Extraction plant 5047.1
3. Refinery. 1558.7
4. Hydrogenation Plant 51.1
5. Inter - Etherification Plant 15.3
6. Margarine/Spreads Plant 7.1
7. Blended Edible Vegetable Oil Plant 55.3

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