Sugar mills may get extra time to sell June open market quota

The Food Ministry is considering the sugar industry's demand to grant 15 more days to mills to complete the sale of June quota of sugar in the open market.

The government sets a target for millers to sell sugar in the open market every month. In June the aim was to sell 17 lakh tonnes. 

Last week, Indian Sugar Mills Association (ISMA) and National Federation of Co-operative Sugar Factories had demanded that the mills should be allowed to sell the June non-levy quota by July 15, citing poor demand from bulk consumers like ice-cream and beverage companies.

"We are considering the industry demand. The decision in this regard will be taken while releasing next month's sugar quota," a senior Food Ministry official said. Millers have sold only 25 per cent of the June quota, the industry had said last week. 

They pointed out that sugar sales have come down despite low domestic prices due to poor offtake from bulk consumers, who account for 60 per cent of the country's annual sugar demand of 23 million tonnes.

"The quantity of sugar released for the current month is very high as compared to the demand. The government has fixed higher quota for June without considering the import done by the bulk consumers," an ISMA official had said.

The demand has reduced off late as they are meeting it through imports, the official had said.

To curb rising sugar prices that touched nearly Rs 50 a kg in mid-January, the government had imposed stockholding limit on bulk consumers asking them not to store sugar that meets more than 15 days of their requirement.

The retail prices have declined by about 30 per cent in last five months on account of improved availability situation owing to higher domestic output as well as imports.

India's sugar production is estimated to touch nearly 19 million tonnes in 2009-10 marketing year ending September, which is three million tonnes more than the earlier estimate.

The country produced 14.7 million tonnes the previous year.