Govt eases stockholding limit for sugar, traders told to further lower prices
New Delhi, Sep 18 (IANS) The government on Friday eased the existing 15-day sugar stockholding limit for bulk consumers to 30 days, subject to the condition that the quantity of stock held beyond the existing 15 days limit is sourced exclusively from sugar imported under advance authorisation scheme (AAS) and tariff rate quota (TRQ).
The stockholding limit for purchase from the open market will remain unchanged and will be restricted to 15 days’ consumption only.
The government has also put in place a mechanism for the declaration and weekly disclosure of sugar stocks every Friday by bulk consumers through the Department of Food and Public Distribution’s online portal, according to an official statement.
The government held detailed consultations with major bulk consumers of sugar and their suggestions have been duly considered with a view to maintaining a stable and orderly sugar market.
Meanwhile, retail sugar prices have declined by around 10 per cent to Rs 58.50 from their peak of Rs 65 in August. However, ex-mill prices have already declined by nearly 25 per cent.
The government observed that the slower decline in retail prices indicates that the benefit of the reduction in ex-mill prices has not yet been fully transmitted through the supply chain to the consumer.
The government made a strong appeal to the sugar trade, wholesalers and retailers to immediately pass on the benefit of the significant reduction in ex-mill sugar prices to consumers, emphasising that the decline in retail prices must keep pace with the correction already achieved at the mill level.
At present, bulk consumers using or consuming more than 10 MT of sugar per month as a raw material for production, consumption or use are permitted to hold sugar stock for a period not exceeding 15 days of their consumption. Bulk consumers have represented that the existing limit may be enhanced, particularly in view of the upcoming festival season.
The measure is intended to strike a balance between the interests of bulk consumers and the need to maintain stability in the domestic sugar market. It will provide greater operational flexibility to genuine industrial consumers during the upcoming festival season while ensuring that additional stocks are sourced from imported sugar rather than placing undue pressure on domestic stocks, the statement said.
In a joint meeting with representatives of ISMA, the National Federation of Cooperative Sugar Factories and sugar trade, Secretary, Department of Food and Public Distribution, underlined that the reduction in ex-mill prices has not yet been reflected fully in retail prices.
The Secretary emphasised that the farmer and the consumer are the two central pillars of India’s sugar policy. The government has consistently worked to balance the interests of sugarcane farmers with the need to maintain stable and reasonable sugar prices for consumers.
–IANS
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