Government may impose stock limits on sugar

Ahead of the festive season, the government is taking steps to control sugar prices. As part of this effort, the government has instructed millers to strictly adhere to monthly stock holding limit orders for the sale of sugar in the domestic market and to accurately submit data through the NSWS portal.

In order to prevent the citizens of country from experiencing higher prices, the government has taken proactive measures. This is also evident in the case of sugar. The government has ensured the stability of sugar prices by making crucial decisions. To maintain consistent sugar prices, the government has restricted sugar export. Moreover, the government has strictly asked all sugar mills to ensure the strict compliance of monthly stock holding limit orders for the sale of sugar in the domestic market and the accurate submission of data in the NSWS portal. If price stability is still not achieved, then, according to the industry sources, the government may impose stock limits on sugar, aimed at preventing price rise.

In a letter dated August 10 addressed to millers, the Department of Food and Public Distribution (DFPD) has conveyed that each sugar mill is required to sell a minimum of 90% of the monthly quota allocated for the respective month. Following this directive, it is anticipated that there will be pressure in the domestic sugar market.

Sugar industry sources, speaking on the condition of anonymity to ChiniMandi, stated, “Even if sugar prices experience a slight increase, the government may consider implementing stringent measures, such as imposing stock limits on traders and bulk consumers.”

“In case, any sugar mill is finding it difficult or unable to sell full quantity of its monthly quota for a particular month, same shall be intimated by the mill before 15th day of every month clearly mentioning the possible quantity to be sold. For example, in case a sugar mill has been allocated monthly sale quota of 100 MT, out of which mills is estimating its sale of only 80 MT, the same may be intimated to this Directorate,” the letter issued by DFPD elaborated.

According to the government’s decision, if a mill fails to provide information about the expected quota to be sold and subsequently does not sell the allocated quantity, the shortfall between the allocated and sold quantities will be deducted from the calculated quota for the following month. For instance, if a mill sells only 80 MT out of the 100 MT quota during a given month, and its eligible quota for the upcoming month, pending allocation consideration, is 120 MT, its quota for the subsequent month will be limited to 80% of the eligible quantity, i.e., 96 MT.

The government has also appealed to sugar mills to diligently report sales and dispatch data on the NSWS portal. Failure to comply with the instructions outlined in the government’s letter may result in stringent action under the provisions of the Essential Commodities Act, 1955, as deemed appropriate, being taken against the respective sugar mills.

According to AgriMandi.live, in Maharashtra, ex-mill prices of S-grade sugar is trading between Rs 3,500 and Rs 3,550, while M-grade sugar in Uttar Pradesh costs between Rs 3,650 and Rs 3,710.