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Government imposes stock limit on sugar mills to prevent price rise

02 Sep 2016 Evaluate

The government has imposed stock limits on sugar mills during September and October, 2016 to prevent further rise in sugar prices during upcoming festival season, as retail sugar prices has crossed Rs 40 per kg. This decision will boost availability of sugar in open market and help to control the price rise. This is the first time that the government has imposed limit on the Rs 80,000-crore sugar industry ever since it was partially decontrolled in 2013.

Food and Consumer Affairs Minister Ram Vilas Paswan said that the stock limit on sugar at the end of September 2016 is 37% of the total sugar available with sugar mills during 2015-16 sugar season, while the stock limit on sugar at the end of October, 2016 is 24% of the total sugar available with sugar mills during 2015-16 sugar season. He further said that fresh crushing of sugarcane starts by October end and new sugar reaches market in November. Therefore, the stock limits have been imposed for only two months. He added that anyone found holding more stock will be treated as an offence and government will take action.

The domestic production has decreased by 11.31% to 25.1 million tonnes in the current 2015-16 marketing year as compared to 28.3 million tonnes in the last year, this resulted in rise in sugar prices. Retail prices of sugar is ruling at Rs 42 per kg in the national capital, while in some locations the prices is as high as Rs 52 per kg. Besides, the outlook for the next 2016-17 marketing year is also not very encouraging, industry body Indian Sugar Mills Association (ISMA) anticipates sugar output to fall to 23.26 million tonnes, while it feels that there would be sufficient supply to meet the domestic demand. Recently, the government has imposed 20% export duty on sugar.


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