New Delhi, [India] August 28 (ANI): Ex-mill sugar prices have declined by around 20 per cent in recent days, while retail prices have also started moving lower, as the government stepped up measures to improve market availability and prevent artificial tightening of supplies ahead of the festive season, the Ministry of Consumer Affairs, Food & Public Distribution said in a press release on Friday.
The Ministry said the recent spike in sugar prices was primarily driven by hoarding and speculation, rather than an actual shortage, with nationwide physical verification of stocks confirming adequate availability. In several cases, sugar mills were found to be holding stocks higher than those declared in their monthly returns submitted to the government.
The government also found instances of mills resorting to "short selling" by selling less sugar than the quantity allocated to them under the monthly quota system. Such practices can constrain market supplies despite adequate physical stocks, it said.
To ensure faster movement of sugar, the government will replace the existing monthly quota system with a fortnightly sugar allocation system from September. Under the new mechanism, mills will be required to sell at least 40 per cent of their allocation in the first week, with the remaining quantity to be sold in the succeeding week. The system is aimed at allowing closer monitoring of demand and supply and enabling the government to respond quickly to changing market conditions.
Sugar mills have also been directed to dispatch sugar within seven days of sale, a move intended to speed up supplies from mills to dealers and consumers while discouraging accumulation and speculative holding. Bulk consumers have been advised against maintaining stocks beyond their operational requirements.
The government expects availability to strengthen further with the start of the new sugar season. Sugarcane crushing is scheduled to begin from October 15, with more than 10 lakh tonnes (LMT) of sugar expected to be produced in October and around 45 LMT in November. Mills have also been permitted to sell October production without restriction to ensure early availability in the domestic market.
The government said additional supplies are also entering the market, including through refiners selling converted sugar under the Advance Authorisation Scheme and dealers and bulk consumers offloading excess stocks. It reiterated that there is no shortage of sugar and that measures will be taken to ensure adequate supplies at reasonable prices during the upcoming festive season. (ANI)
Sugar prices fall 20% as government steps up measures to curb hoarding, ensure supplies
