The Centre has allowed sugar mills to start selling their October quota produce in advance by asking them to use a total of 13 lakh tonnes (lt) with immediate effect. to rein in rising domestic prices.

In a separate order, the Food Ministry has asked sugar mills, traders, wholesalers, retailers including big chains, to immediately disclose their stock position on a specific portal and update it every Monday.

Though October quota for domestic sales by each sugar mill will soon be allotted by the Food Ministry, the first tranche has been decided based on their past sales record, sources said.

According to Consumer Affairs Ministry data, the all-India average wholesale price of sugar has reached ₹4,054.69/quintal as of Thursday, up by 1 per cent in a month and by 3 per cent from a year- ago. However, the average retail price was ₹43.73/kg on September 21, ₹43.29/kg a month ago and ₹42.57/kg a year ago.

With an estimated stock of 83 lt at the end of August and crushing season likely to start earlier than normal Diwali time, India has sufficient stocks for domestic consumption with absolutely no shortage for festivals, the Ministry said. The first tranche of domestic sales quota of October has been allowed to be sold with immediate effect while more quota will be released in due course, it said.

“Since there is no deadline for selling the quota and rather, it is a relaxation to sell the monthly quota from 30 days to 40 days now, mills will think twice before rushing to sell the sugar at earliest, particularly when there is bullishness in the market,” said a commodity analyst. The government should have encouraged mills through incentives such as higher sales quota later to sell the sugar in a reduced window so that availability is increased, the analyst said.

Also read: Sugar stocks zoom on expectations of fall in output pushing up prices

Mandatory disclosure

The ministry issued an order making it mandatory for traders/wholesaler, retailer, big chain retailer and processors to disclose stock position of sugar on a specific portal -- https://esugar.nic.in immediately and update it every Monday.

“This mandatory weekly stock disclosure for these entities is another proactive step in efforts to maintain a balanced and fair sugar market. By preventing hoarding and speculation, the government is aiming to ensure that sugar remains affordable for all consumers,” food ministry said in a statement.

This proactive measure empowers regulatory authorities to closely monitor stock levels and take prompt action against any potential market manipulation, an official spokesperson said.

Also read: World stares at 2 million tonnes sugar deficit, says ISO

It will also provide real-time data on sugar stocks and help the government to make further policy decisions, as and when need arises, to mitigate the impact of rumours (of rising sugar prices) on consumers and the industry, the official said. Appealing sugar mills and traders to adhere to the monthly domestic quota norms, the government has warned them of strict action for any violation.

According to Indian Sugar Mills Association (ISMA) forecast, sugar production is likely to be 317 lt, excluding 45 lt diversion towards ethanol during 2023-24 season (October-September). The output for the current season is estimated at 328 lt, excluding diversion of 42 lt for ethanol. The annual demand is pegged at 275-280 lt.

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