Government releases extra sugar to keep prices stable

The government has released extra quotas of sugar in a bid to control the price rise, as per the written information provided by KV Thomas, Minister for Consumer Affairs Food and Public Distribution System.  This effort by the government to keep sugar prices stable were accomplished through the policy of regulated release mechanism.

As per the mechanism, the unsold non-levy quota of about 2 lakh tonnes from April-June quarter was allowed for sale in the open market up to August 14, 2012 on July 13. The sugar mills have been directed to sell at least 70% of July-September quota by August, 2012 vide order dated July 24, 2012. Besides, additional quota of 2.66 lakh tonnes has been released on July 27 to be sold off by August 31 and another additional quota of 4 lakh tonnes has been released on August 07 to be sold off by August 31.

In the ensuing 2012-13 sugar season, there has been insufficient rains due to which markets have started expecting that the production would be on the lower side which has led to rise in sugar prices. This rise can also be coupled with fluctuations in international sugar prices, etc.

Besides, the market price of sugar is also depended upon many factors like cost of raw material mainly sugarcane, conversion cost, domestic demand and supply situation, market sentiments, trend of international prices and production, etc. National Commodity & Derivatives Exchange (NCDEX) is an on-line multi commodity exchange offering contracts in 34 commodities including sugar which facilitates price discovery and price risk management.