Food EGoM shelved over Pawar, Thomas differences | business | Hindustan Times
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Food EGoM shelved over Pawar, Thomas differences

business Updated: Oct 20, 2011 23:59 IST
HT Correspondent

A meeting of an inter-ministerial panel on food policy, which was to decide on freeing more sugar for exports, was called off on Thursday due to runway inflation and persisting differences between the food and agriculture ministries.

HT had, on October 10, reported differences between food minister KV Thomas' estimates of India's sugar output and that of agriculture minister Sharad Pawar's.

India's food inflation, which recorded a double-digit rise to 10.60% on Thursday, the sharpest increase in six months, also prompted the government to defer a decision on whether to allow exports of sugar.

The empowered group of ministers (EGoM) on food, which is headed by Union finance minister Pranab Mukherjee, was to take a call on sugar export based on a joint proposal by the two ministries, but a consensus could not be reached.

Thomas has stuck to his production estimate of 24 million tonnes, contrary to Pawar's 26 million tonnes. While Pawar has argued for more exports, citing a surplus, Thomas appears reluctant, fearing a price spike in the festive season.

India is headed for a second straight year of surplus, with prices ruling steady between Rs 31-32 a kilo and rising only 0.23% in the past half-year.

While Pawar's ministry is responsible for putting out cane estimates, the food ministry, which Thomas heads, works out the figures for sugar output.

Varying estimates of sugar output are tricky.

Allowing too much export could fan domestic prices, while curbing exports of surplus stocks affects millers' ability to pay farmers.

Domestic demand of the sweetener in India - the world's largest consumer and second-largest producer - hovers around 21.5 million tonnes.