(2)

This has reference to your news item appearing in the 2nd May 2006 issue of your esteemed newspaper under the heading "Sugar mills supplies to USC exempted from sales tax".
While reporting the decision, the report goes on to comment on the issue, which needs to be placed in its correct perspective. The differential works out to Rs 1.052 million for 10% of production, which is an 'extraordinary' burden. The sales price of sugar during the current sugar season ranged from Rs 24 to Rs 36 per kg.
Seemingly, the high price does not take into consideration the high costs, particularly of sugarcane. Criticism of the industry for selling stocks to the public at 'irrationally high rates' does not take into account the factors not of the industry's making. Demand and supply influence the local market price, which in turn is a function of production.
Production was only 65% of the requirement. The world market is highest ever and the C and F price exceeds the local price. The NAB investigation was perhaps for finding out reasons for the price escalation. Comment regarding blockage is sensationalism.