Sugar Prices Fall 20% as Supply Improves

• Ex-mill sugar prices have declined by around 20% in recent days.
• Physical verification confirms adequate sugar stocks across the country.
• Fortnightly sugar allocations will begin from September.
• Mills must dispatch sold sugar within seven days.

GG News Bureau
New Delhi, 28th Aug: Ex-mill sugar prices have declined by around 20% in recent days, with retail prices also beginning to move downward, the government said on Friday.

The government said a series of measures have been taken to ensure adequate domestic availability and prevent artificial tightening of supplies. Retail prices are expected to follow the downward movement in ex-mill prices as changes move through the supply chain.

According to the government, the recent spike in sugar prices was primarily linked to hoarding and speculation, rather than an actual shortage, as the country has adequate sugar stocks.

Stock Verification Confirms Adequate Supplies
A nationwide physical verification exercise at sugar mills has reaffirmed the availability position. In several cases, mills were found to be holding stocks higher than those declared in their monthly returns.

The exercise also found instances of short selling, where mills sold less sugar than the quantities allocated under their monthly quotas. The government said such practices can unnecessarily restrict market supplies despite adequate physical stocks.

Fortnightly Quota System From September
To ensure faster movement of sugar into the market, the government will introduce a fortnightly sugar allocation system from September, replacing the existing monthly quota mechanism.

Under the new system, mills will be required to sell at least 40% of their allocation in the first week, with the remaining quantity to be sold in the succeeding week.

The government said the system will allow closer monitoring of demand and supply, quicker responses to market conditions and prevention of artificial supply tightening. Additional quotas can also be released whenever required.

Mills Directed to Dispatch Sugar Within Seven Days

Sugar mills have been directed to dispatch sugar within seven days of sale. The government said the measure, combined with fortnightly allocations, will improve the movement of sugar from mills to dealers and consumers.

Bulk consumers have also been advised against accumulating stocks beyond their operational requirements.

New Season to Add to Sugar Availability
Sugarcane crushing for the new season is scheduled to begin from October 15, with more than 10 lakh tonnes (LMT) of sugar expected to be produced during October.

The government has permitted mills to sell October production without restriction so that new-season sugar reaches the domestic market at the earliest. Production is expected to reach around 45 LMT in November.

In addition, operational mills in Karnataka and Maharashtra are expected to add around 2 LMT during September.

Government Assures Consumers of Adequate Supply
The government said additional supplies are also entering the market, including converted sugar permitted for sale under the Advance Authorisation Scheme. Dealers and bulk consumers holding excess stocks are also offloading sugar.

The government reiterated that there is no shortage of sugar in the country and said it will continue monitoring prices, stocks and movement to ensure adequate supplies at reasonable prices, particularly during the upcoming festive season.