Sugar stockholding norm for bulk users relaxed

The government has decided to relax stockholding limit on bulk sugar consumers, such as ice-cream and beverage makers, by allowing them to keep the sweetener for 90 days of their usage from the current 15 days.

The decision comes amid a sharp fall in sugar prices — of about 40 per cent — in the last seven months. Sugar prices have fallen to Rs 30 a kg from Rs 48 a kg in mid-January in Delhi mainly due to stockholding limit on bulk consumers.

The Food Ministry has decided to relax the stockholding limit for bulk users and now they can store sugar equivalent to 90 days of their requirement, a senior government official said today.

The notification is likely to be issued soon, the official added. The relaxed norm would be valid for six months.

In August last year, the government had imposed the stockholding limit on bulk consumers, asking them to refrain from stocking sugar for more than 15 days. Later, in February this year, the government had reduced the stockholding limit to 10 days, which was again brought back to 15 days in May. Bulk consumers are those who have an average consumption of more than 10 quintals a month.

The industry had been demanding that the stockholding limit on bulk users be relaxed to discourage them from buying imported sugar, on which there is no such restriction.

With sugar prices under control, the Centre has started reversing measures it had taken to boost domestic supplies and curb rising prices. From May, sugar mills have been permitted to sell their quota on a monthly basis, instead of offloading it every fortnight.

Agriculture and Food Minister Sharad Pawar had earlier said that the Centre would consider the industry’s demand of imposing import duty on refined (white) sugar after assessing the likely production in 2010-11 sugar year. The duty-free import of raw and white sugar is valid till December 2010.

Sugar production in India, the world’s second largest producer and biggest consumer, is estimated to touch 18.8 million tonnes in 2009-10 season, nearly three million tonnes more than the earlier projection.

In 2010-11, sugar output is expected at 25.5 million tonnes, higher than the annual demand of 23 million tonnes.

The country had imported about 6 million tonnes of sugar since early last year as sugar output in 2008-09 and 2009-10 crop year was lower than the domestic demand.