Without seeking a revision, Indian Sugar Mills Association (ISMA) has pointed out to the Food Ministry the potential adverse impact for the millers about the high level of quota released for domestic sales.

However, government officials said it is lower than year-ago level and adequate for the festival demand.

In a letter to Food Secretary, ISMA president Aditya Jhunjhunwala said the average actual sugar sales for the last few months have been around 22 lakh tonnes (lt), whereas the government has fixed the quota at 23.5 lt. “The government had to extend timeline of monthly sales quota for July 2022 up to August 31 due to lower estimated sales for the month,” he said in the letter.

The government has fixed the minimum selling price at which mills are mandated to sell and do not unnecessary lower the rates in a surplus production year to prevent accumulation of sugarcane arrears. The Centre also has re-introduced the allocation of mill-wise monthly release order quota to be sold in domestic market to check excess supply, which again is one of the factors for accumulation of cane arrears.

But, a government official said that in September 2021, the quota was 24.5 lt, which was 1 lt higher than the current allocation. As many festivals including Dussehra and Diwali are coming in October there will be higher demand for sugar this month, the official said.

However, the government has been sympathetic to mills’ concern and has been extending the sales period time to enable them exhaust the allocated quantity and if such situation comes, it will consider at that time.

Jhunjhunwala said that due to non-fulfilment of full quota for the month, the government had allowed unsold quantity of September 2021 quota to be sold upto October 31, 2021. “Moreover, monthly sales quota for the month of September 2019 and 2020 was fixed at 19.5 lt and 22 lt, respectively in tune with the monthly average sugar sales during that period,” he said in the letter.

But industry sources said that even 1 lt extra allocation has depressed the sentiments with current ex-mill prices of sugar hovering around ₹34-35 per kg in most states, which are lower than last year’s corresponding period.

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