New Delhi: Sugar prices decline as ex-mill rates fell by around 20% in recent days, while retail prices also started falling, the government said on Friday.
The government has taken several steps to improve sugar availability and prevent artificial supply restrictions. It expects retail rates to follow the ex-mill trend as price changes move through the supply chain.
Officials have monitored sugar prices, stocks and movement across the country. Recent checks found adequate sugar stocks despite the sharp price rise seen earlier.
The government said hoarding and speculation mainly drove the recent price spike. It also said the country had enough sugar for domestic consumption.
A nationwide physical verification drive checked stocks at sugar mills. In several cases, officials found that mills held more sugar than they had declared in their monthly returns.
The checks also found cases of short selling. Some mills sold less sugar than their monthly quota allowed.
Such practices can restrict market supplies even when mills hold sufficient stocks. Therefore, the government has moved to improve the flow of sugar from mills to consumers.
The government will replace the monthly sugar allocation system with a fortnightly quota from September. Under the new system, mills must sell at least 40% of their allocation during the first week.
They must sell the remaining allocation during the following week. This system will help officials track demand and supply more closely.
Officials can also release additional quota when market conditions require it. The government expects the flexible system to keep supplies aligned with domestic demand.
Sugar prices decline as faster dispatch and new production boost supply
The government has also directed sugar mills to dispatch sold sugar within seven days. This measure aims to reduce delays between mills, dealers and consumers.
Together, the fortnightly quota and seven-day dispatch rule should speed up sugar movement. They should also discourage unnecessary stock accumulation and speculative holding.
The government has advised bulk consumers to avoid storing sugar beyond their operational needs. This step should help maintain regular supplies in the domestic market.
Meanwhile, the new sugar season will add more supplies in the coming months. Sugarcane crushing will begin from October 15.
More than 10 LMT of sugar is expected during October. The government has allowed mills to sell their October production without restrictions.
As a result, new-season sugar can reach the domestic market at the earliest. Production could then rise to around 45 LMT in November.
Operational mills in Karnataka and Maharashtra are also expected to add around 2 LMT during September. The additional output should further strengthen supplies before the festive season.
The government said these steps would support continuous sugar availability across the country. It also assured consumers that India had no shortage of sugar.
Officials will continue to monitor prices, stocks and sugar movement. They will also assess market conditions and take further action when necessary.
The latest measures combine stock checks, tighter quota monitoring and faster dispatch. They also bring new-season production into the market sooner.
The government said these steps should improve market availability and support reasonable prices. It urged consumers not to panic-buy or build excessive stocks.
The downward movement in ex-mill prices has already started to reach the retail market. Therefore, retail prices are expected to continue following the lower ex-mill trend.
The government said its measures would particularly support availability during the forthcoming festive season. It will continue monitoring the market to prevent artificial tightening of supplies.
