India not averse to freeing sugar sector: Food Secretary

NEW DELHI: India is not averse to freeing the sugar sector from government control provided the interests of farmers and millers are protected, the country's food secretary said on Tuesday.

B.C. Gupta made the comments at an international conference where traders and analysts are expected to renew their call for opening up India's sugar sector to allow the country to become a regular exporter of sugar, competing with top producer Brazil.

To ensure cheap availability of the sweetener and to restrain high food inflation, the federal government sets the price mills must pay to farmers and buys 20 percent of their output at a huge discount for its welfare schemes.

It also decides how much sugar will be sold in the open market and at times imposes limits on stocks that large buyers can hold -- all measures which some industry players say forces India into a damaging cycle of boom and bust.

Copyright Reuters, 2011