The Union Ministry of Consumers Affairs and Public Distribution has notified the norms for creating three million tonnes of sugar buffer stock. As per the norms, instead of buying sugar from mills, the government will finance the cost of sugar and storage will be at mill-owned godowns, along with sugar pledged by mills with banks. It will also bear a finance cost of 12% a year or actual interest charged by the banks, whichever is lower, along with insurance and storage charges at 1.5% a year.
The notification stated that what has irked the mills is that the sugar price of Rs 29 per kg is the same as the minimum ex-factory price notified for mills. However, this price will be only for reimbursement of finance and insurance charges by the government to the mills. The reimbursed charges on buffer stock, which government has fixed for each mill, will have to be used by the latter to clear cane farmers’ dues. The government will charge the reimbursement expenses to the subsidy account.
According to the notification, the buffer stock will be for a period of one year, beginning July 1, 2018, and charges will be reimbursed to mills on a quarterly bases upon fulfilment of certain conditions. However, another issue that comes up is the release mechanism for sugar mills. The mills are annoyed with the quota system.
MoneyWorks4Me is a SEBI-registered Investment Adviser (IA) dedicated to helping investors build long-term wealth through transparent, research-driven, conflict-free guidance. Founded in 2008, we started our journey as a Research Analyst (RA), providing deep fundamental analysis, intrinsic value insights, and long-term investing frameworks for Indian equities. In 2017, we transitioned to a full-fledged SEBI-registered Investment Adviser, strengthening our commitment to acting as a fiduciary—always putting the investor’s interest first.
To become India’s most trusted, research-powered fiduciary advisory platform—where every investor, regardless of experience, can make calm, confident, and well-reasoned investment decisions.
MoneyWorks4Me ensures this through: