Banner Sugar & Vegetable Oils

DIRECTORATE OF SUGAR & VEGETABLE OILS

ABOUT US

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

sugar

(A) SUGAR DIVISION

There are 732 installed sugar factories in the country as on30.09.2017, with sufficient crushing capacity to produce around 338lakh MT of sugar. The capacity is roughly distributed equallybetween private sector units and co-operative sector units. Thecapacity of sugar mills is, by and large, in the range of 2500 TCD-5000 TCD bracket but increasingly expanding and going even beyond10000 TCD. Two standalone refineries have also been established inthe country in the coastal belt of Gujarat and West Bengal whichproduce refined sugar mainly from imported raw sugar as also fromindigenously produced raw sugar. The sector-wise break-up of sugarmills in the country is as given below :-

Sl. No. Sector Number of factories
1. Co-operative 327
2. Private 362
3. Public 43
Total 732*
*Includes each refinery in West Bengal & Gujarat.

sugar

Cane Price Arrears

The payment to sugarcane farmers by sugar mills, though statutorilysupported by various statutes and enforced by State Governments,get affected by the dynamics of domestic market price as well asinternational situation related to export possibilities. Due to surplussugar production, the prices of sugar had been subdued in thedomestic market, adversely affecting the liquidity of the sugar millsand their ability to pay the cane dues to the sugarcane farmers intime. Consequently, the Government has implemented variousschemes to increase the liquidity of the sugar mills so that the caneprice arrears could be kept to a minimum during these seasons. Theposition of cane price payments and arrears for the past few sugarseasons, 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 30/09/2017 57,205.83 55,204.66 2,001.17 3.50
2015-16 30/09/2016 60,282.38 56,992.92 3,289.46 5.46
2014-15 30/09/2015 65,934.39 57,880.17 8,054.22 12.22
2013-14 30/09/2014 58,130.24 52,173.04 5,957.20 10.25
2012-13 30/09/2013 60,008.57 56,807.64 3,200.93 5.33
2011-12 30/09/2012 51,917.00 50,949.67 967.33 1.86

The new system for distribution of sugar in the PDS

The Central Government has decontrolled the sugar sector byremoving the levy obligation on sugar mills from 2012-13 sugarseasons. The National Food Security Act (NFSA), 2013 is now beinguniversally implemented in the entire country. There is no identifiedcategory of BPL under the NFSA, 2013. However, the Antyodaya AnnaYojana (AAY) beneficiaries are clearly identified. The Governmenthas reviewed the sugar subsidy scheme in May, 2017 and hasdecided that it is imperative to give access to consumption of sugar,as source of energy in diet, for the poorest of the poor section of thesociety i.e. AAY families. Accordingly, the Central Government hasdecided to continue to reimburse a fixed subsidy of Rs. 18.50 per kg@ 1 kg per month per AAY family to participating States/ UTs. TheStates/UTs are also allowed either to absorb the additional cost onaccount of handling, transportation and dealer’s commission or passit on to the consumer by adding it to the Retail Issue Price (RIP) ofRs. 13.50 per kg under the Public Distribution System (PDS).

PRODUCTION, CONSUMPTION AND STOCKS OF SUGAR

Production of Sugar

SSugar production in India has been cyclic in nature. Every 2-3 yearsof high sugar production are followed by 2-3 years of low sugarproduction. From the sugar season 2010-11 to 2015-16, the countrycould also generate surpluses for export, earning valuable foreignexchange in the process. But due to continuous drought like situationin Maharashtra & Karnataka during the last two sugar seasons, theproduction of sugar in the previous sugar season 2016-17 has beenlower than the domestic demand. However, with the carry over stockof 77.10 Lakh Tons of last sugar season and estimated production of202 Lakh MT, the sugar availability was sufficient to meet thedomestic demand.

Season wise production of sugar from 2012-13 and onwards is givenbelow :-

Sugar Season

(October-September)

Production of Sugar

(Qty. in lakh tonnes)

2012-13

251.82

2013-14

245.54

2014-15

284.63

2015-16

251.21

2016-17(Estimated)

202.27

2017-18(Projected)

248.85

* - 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 2012-13 and onwards is given below :-

(Qty. in lakh tonnes)

Sugar Season

Closing Stock

2012-13

91.09

2013-14

72.13

2014-15

88.76

2015-16

77.10

2016-17(Provisional)

39.62

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

2016-17

(Provisional)

Carry- over stocks with sugar mills from Previous season

66.96

91.09

72.13

90.00

77.10

Less –Adjusted 5%

0.95

-

-

-

-

Export quantity from 2010-11 stock against OGL -3 (allowed but exported after Sep, 11)

-

-

-

-

-

Net Opening Stock

66.01

91.09

72.13

90.00

77.10

Production of Sugar

251.82

245.54

284.63

251.21

202.27

Imports

6.76

1.05

-

-

4.75*

Estimated Total availability

324.59

337.68

356.76

341.21

284.12

dispatches from mills for Internal consumption

230.00

243.00

256.00

247.61

244.00

Exports against ALS/

AAS obligation and OGL

3.5

22.55

12.00

16.50

0.50

Domestic Raw Despatches

-

-

-

-

-

Total Estimated releases/Dispatches

233.50

265.55

268.00

264.11

244.50

Estimated Closing Stocks with sugar mills at the end of season

91.09

72.13

88.76

77.10

39.62

 

* Import of 5 Lakh MT raw equivalent to 4.75 LMT white/referred Sugar

Ex-mill & Retail Prices of Sugar

The range of price of sugar (S-30 Grade) in the major centres of the country from sugar season 2009-10 to 2016-17 (upto September, 2017), was as under :-

Sugar Season

( October - September)

*Range of Ex-mill Prices

(Rs. per quintal)

**Range of retail prices

(Rs. per kg.)

2009-10

2500-4400

25.00-47.00

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

2350-3500

30.55-41.00

2016-17

3394-3712

40.76-43.48

Source: * Daily Trade Mart Enquiry,Directorate of Sugar and Vegetable Oils.

** Price Monitoring Cell, Department of Consumer Affairs

Export of Sugar

Sugar is an essential Commodity. Its sales, delivery from mills, and distribution were regulated by the Government under EC Act, 1955. 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 decanalised. Under decanalised 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 order was reintroduced from 01.01.2009, in view of drop in sugar production. However, due to surplus production during 2010-11 sugar season, Government permitted exports under OGL on the strength of the release order.

The phase of surplus production continued and the Government vide Notification No. 1059(E) dated 11.05.2012 has again dispensed with the requirement of export release orders. Thereafter, the export of sugar was allowed free subject to prior registration of quantity with DGFT. Subsequently, w.e.f. 07th September, 2015, the requirement for prior registration (RC) was dispensed. Due to expected drop in sugar production during 2016-17 sugar season, as per current policy, export of sugar under OGL is free subject to payment of 20% custom duty w.e.f. 16th June, 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 27.04.1999. 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 28.04.1998. The basic custom duty was increased from 5% to 20% w.e.f. 14.04.1999 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 09.02.2000 along with continuance of countervailing duty of Rs. 950/- per ton (w.e.f. 01.03.2008) plus 3% education cess.

Sugar production in the sugar season 2008-09 had been declined and in order to augment the domestic stock of sugar, the Central Government has allowed import of raw sugar at zero duty under Open General License (OGL) w.e.f. 17.04.2009 which was applicable till 30.06.2012. Thereafter, a moderate duty of 10% was re-imposed w.e.f. 13.07.2012 which was subsequently increased to 15% w.e.f. 08.07.2013. Due to surplus stocks of sugar in the country and in order to check any possible imports, the Government increased the import duty from 15% to 25 % on 21.08.2014, which was subsequently increased to 40% w.e.f. 30.04.2015, which was subsequently increased to 50% w.e.f. 10.07.2017 which is still is vogue.

In order to minimise the regional imbalances in demand and supply for keeping the sugar prices at reasonable level, the Government permitted 8 Lakh MT of raw sugar import by sugar mills in two tranches of 5 Lakh MT at 0% duty and 3 Lakh MT at 25% duty for processing it to the white sugar and make available for domestic consumption. During the current sugar season 2017-18, the sugar production is estimated to be at 248.85 LMT which is sufficient to meet the domestic requirement.

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

2016-17 (Upto July, 2017)

17.98

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

2016-17 (Upto July, 2017)

22.98

* Includes quantity under Advanced Authorisation Scheme.

PRODUCTION SUBSIDY ON CANE CRUSHED

The Government Notified performance based production subsidy scheme vide notification dated 02.12.2015 which was subsequently amended vide notification dated 12.09.2016 to provide subsidy @ Rs. 4.50 per quintal on cane crushed during 2015-16 sugar upto 19.05.2016 (date of withdrawal of scheme) contingent upon achievement of targeted performance in respect of sugar export and supply of ethanol under Ethanol Blending Programme EBP (in case the mill have ethanol production capacity). Rs. 511.90 crore have been disbursed to 207 sugar mills under the production subsidy scheme till financial Year 2016-17.

Sugar Standards:

Sugar Industry Sectional Committee of Food & Agricultural Division( FAD-2), Bureau of Indian Standard(BIS), with the concurrence of Head, Food & Agricultural Division, BIS for recommends the Indian Sugar Standards from year to year for use by the sugar factories, trade, Government Organizations, etc and to review the price differentials for different grades of sugar and other related matters.

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 veg

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%

(20/01/14)

15%

(24/12/14)

20%

(17/09/15)

Vegetable origin

 

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

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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