Output fall won't push sugar prices much beyond MSP of Rs 31 per kilogram

In the 2018-19 season, the government had facilitated creation of a 3 million tonnes sugar buffer stock with an expenditure of around Rs 1,550 crore. The validity of the buffer stock expired on June 3

The country’s sugar production is projected to fall to below 30 million tonnes in 2019-20, the lowest in the last three years, due to drought in several key growing states.

However, even that won’t be good enough to push up prices much beyond the minimum sale price of Rs 31 per kilogram because of an overhang of record inventories.

From the government side, there is a move to create fresh sugar buffer stock of 5 million tonnes to absorb the surplus with an expenditure of around Rs 2,100 crore for the 2019-20 season.  But industry players said that too won’t work and