India. Govt likely to put limit to sugar stock in mills

01.09.2016

The Union government is planning to restrict the sugar stock of mills so that the rest of the produce can be released in the market. The idea is aimed at ensuring more supply into the market so that prices would not go up drastically. The mills are asked to stock maximum 37% of their total produce.

An official announcement on the norm is expected in a couple of days, a senior official from the state cooperation department said.

The current retail market prices of sugar are in the range of Rs 40 to Rs 45. Every year the prices surge during the festival season. To avoid it, the government has decided restrict the sugar stock to 37% of the total production. The mandatory export quota will not not be included in this stock limit .

P G Medhe, consultant to the Chhatrapati Rajaram Cooperative Sugar Mill here said that sugar mills will be allowed to keep only 37% stock from October 1. This would push the mills to sell more sugar in the retail market and the excess supply will keep the prices under control.

A senior trader said that the Union and the state governments are aware of the fact that people will not buy more sugar just because prices are down.

Sugar production in the state has gone up consistently in the past three years. The unsold sugar has led to piling up of stock and putting pressure on factories. There has been financial assistance from the government to the factories, but it has limited reach. Had the government increased its assistance, factories would have been able to sell the sugar in the market, sources said.

In June, the Maharashtra State Cooperative Bank, the premiere bank at state level among the cooperative sector, has kept the sugar valuation unchanged at Rs 3,100 per quintal. This has helped in stabilising the prices in the wholesale as well as the retail market.


indiatimes

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