Sugar prices expected to remain strong as free sale quota for August is less than expected

29-Jul-2024 12:48 PM

New Delhi. The Union Food Ministry has allocated a free sale quota of only 22 lakh tonnes of sugar for mills across the country to sell in the domestic sector during the month of August, which is 2 lakh tonnes or 8.3 percent less than the quota of 24 lakh tonnes announced for July and 1.50 lakh tonnes or 6.4 percent less than the quota of 33.50 lakh tonnes fixed for August 2023.

In view of festivals like Rakshabandhan and Janmashtami, the demand and consumption of sugar is expected to increase in August, while the millers will not be forced to sell their stock by reducing the price in a hurry due to the quota coming less than expected.

It seems that the government's thinking is probably that the southwest monsoon will be in its phase in August, due to which the demand for sugar will not increase much. 

The government has ordered the sugar mills to strictly follow the stock holding rules. A notification issued by the Food Department said that the rules are not being followed properly by some units/groups.

The mills are not paying attention to maintaining the stock holding limit of sugar in the prescribed quantity through the monthly stock holding limit order issued by the Sugar Directorate, while the Directorate has been repeatedly instructing for this.

The indigenous industry has a huge surplus stock of sugar while the new marketing season of its production is going to start after two months.

The government is trying to keep its prices under control by ensuring adequate supply and availability of sugar.

For this, commercial export of sugar has been banned for more than a year. At present, there is no possibility of opening export.

Meanwhile, the Union Food Secretary has said that the proposal to increase the ex-factory minimum selling price (MSP) of sugar can be considered in the next few days. Sugar prices may remain strong in the coming days.