Sugar traders deny hoarding charges

Following the Union government’s move to empower state governments to impose stock limits on sugar to control price rise, the newly-formed sugar traders’ body has said that no hoarding is taking place.

The traders’ body has said that even if the government wants to impose stock limits, it should ensure that normal supply to consumers is not impacted. Last week, Union food and consumer affairs ministry empowered states to impose stock limits and take all necessary measures to curb rising sugar prices.

This year, sugar prices are up almost 25 per cent, following estimated 10 per cent-plus fall in the production and rising exports because of rebound in international prices and export subsidy provided by the Centre.

Praful Vithalani, chairman, All India Sugar Trade Association said, “Stock for minimum 15 to 20 days’ consumption is always in trade. In bear market, it is about 1.2 million tonnes, during normal market it’s 1.5 million tonnes, while during bull market it’s around 1.8 million tonnes.”

Despite imposition of stock limits, prices of pulses have remained elevated. Sugar traders propose to avoid similar chaos.

Vithalani said, “If stock in trade comes down to 1.2 million tonnes because of stock limit and if it becomes totally sellers’ market, price can shoot further.”

If at all the government wants to impose a limit, the association said, “Traders should be allowed sufficient time to liquidate their stock in trade. Supply for the public distribution system (PDS) should be exempted. And one-time exemption for sugar stock lying in NCDEX warehouses should be provided.”

The Association has also written to the Prime Minister’s Office, saying that till March-end 13.2 million tonnes sugar was dispatched by mills to the domestic market, almost similar to the last year. As on April 1, mills were holding stock of 16.1 million tonnes, which is to be distributed till the new sugar season begins.

Hence, any stock limits could destabilise supply and choke up trade channels.