INDIA: Government issues release for 900,000 tonnes more sugar
Published: 08/17/2012, 2:48:32 PM
The union ministry for consumer affairs, food and public distribution has instructed the Indian Sugar Mills Association to release 900,000 metric tonnes sugar in the market by the end of August, according to the Times of India newspaper.
The ministry has also announced that it will not sanction any extension to the sale order of unsold sugar.
The retail price of sugar has increased from INR30 (US$0.54) per kg to INR40 per kg within a period of month.
A senior official from ISMA said that the price of sugar has been escalating since last few weeks. Though sugar production in states like Maharashtra and Karnataka is going to be hit because of water scarcity and harvesting of premature sugarcane for using as fodder--Uttar Pradesh and Tamil Nadu states can compensate the drop in production.
There was a non-levy left-over sugar quota of about two lakh tonne during the April to June quarter. The government allowed its sale in the open market at the earliest.
A statement issued by the ministry states that out of total sugar quota granted to every sugar mill for July to September period, at least 70% should be sold in the same period. The government expects a huge supply of sugar in the market, which would control sugar price.
The government has also released additional quota twice with a gap of seven days, to ensure sufficient supply of sugar in the market. The first quota of 266,000 tonnes of sugar was released on July 27 and another additional quota of 400,000 tonnes was released on August 7.
The additional sugar was released in the market because of the ongoing festival season, said the official from ISMA. "There will be a festivals across the country and demand for sugar, grains and pulses will grow. Though the average consumption of sugar per person is as low as 270 gm per month, it goes up during the festival time. Apart from individual customers, the sweets makers, confectioneries, soft drink making companies and branded beverages producers buy sugar in bulk. These sectors rely hugely on festivals to increase their sale."