Govt releases more sugar to quell price rise ahead of festive season

To make adequate quantities of sugar during the festival season, the central government has decided to make available 4 million tonne of non-levy (free-sale) sugar for the open market in the months of October and November.

According to an official statement, released by the government, of the total quantity allocated, sugar mills will have to sell off at least 45% of that in either October or November. This has necessitated because of sharp increase in the retail price of sugar in the last few months.

According to department of consumer affairs, the average retail price of sugar has risen by Rs 3 per kilogram since August 1, 2012 to Rs 40 per kilogram because of strong demand.

Major Hindu festivals including Diwali fall in these two months.  For July to September the government had allocated 4.5 million tonne of sugar for free sale. However, this time, almost the same quantity has been allocated for sale in just two months.

In addition to mills will have to provide 396,000 tonne of sugar for sale through the ration shops in October and November.

“This is also big increase than the last quarter and has also been available keeping in mind the festival season,” a senior official said. He said in the coming months, government might shift towards a quarterly sugar quota release mechanism to enable mills to plan their sale and dispatch routines.

In India, government determines the quantity of sugar that each mill can sell every quarter. It also fixes the quantum they need to sell to the government for running its social programmes. The demand for sweetener usually increases during the festival months.

Recently, a proposal from the food ministry to increase the price at which sugar is sold by the government in ration shops was deferred keeping in view the festival season.

India’s sugar production in 2012-2013 crop marketing season that will start from October has been estimated to be around 24.5 million tonne, down 6.4% from this year.