Govt to release less sugar in open mkt during July

The Food Ministry is likely to release less sugar in the open market in July owing to less demand from bulk consumers such as ice-cream and soft drink manufacturers during monsoon and higher allocation this month.

"Sugar release for open market sale, next month could be lower than July last year because of lower demand and unsold stock of this month," a senior official said.

However, the official said quota for the next month would be comfortable to meet the demand and prices would remain stable.

The ministry, which fixes the quantity that mills should sell in the open market every month, had released 14.9 lakh tonnes of non-levy sugar (to be sold in the open market) in July last year. For June, the non-levy quota has been fixed at 17 lakh tonnes.

According to sources, about 14.5 lakh tonnes of sugar is expected to be released next month. Of this, carry over stock from the current month would be 3 lakh tonnes and imported sugar 3.7 lakh tonnes.

The Food Ministry generally releases less quantity of sugar in July in comparison to other months in a year as demand from ice-cream and soft drink manufacturers declines in this particular month because of monsoon, the official said.

He said, "The unsold quantity of June-month will roll over to the next month."

Last week, Indian Sugar Mills Association and National Federation of Sugar Cooperative Factories had written to the government demanding 15 days more to sell June quota due to poor demand from bulk consumers despite low prices.

Bulk consumers constitute about 60 per cent of the country's annual demand of 23 million tonnes. The government has restricted them not to store sugar for more than 15 days of their requirement.

Sugar production in 2009-10 crop year is estimated to be nearly 19 million tonnes. Sugar prices declined by about 30 per cent to Rs 32 a kg from nearly Rs 50 a kg in mid-January.