New Delhi: Is there really a shortage of sugar in the country? The Government of India says no.
As concerns over rising sugar prices emerged in recent weeks, the government has stepped up monitoring of stocks, sales and movement across the country. Its latest assessment shows that sugar availability remains comfortable, with ex-mill prices having declined by around 20% in recent days. Retail prices have also started coming down, with the government expecting the decline at the consumer level to follow the movement in ex-mill prices.
The government has attributed the recent sharp spike in prices primarily to hoarding and speculation, rather than any actual shortage of sugar.
Stock verification finds adequate supplies
A nationwide physical verification exercise at sugar mills has reaffirmed that adequate stocks are available across the country.
In several instances, mills were found to be holding stocks higher than the quantities declared in their monthly returns submitted to the government. The exercise also identified cases of short selling, where sugar mills were selling less sugar than the quantity allocated to them under their monthly quota.
According to the government, such practices can unnecessarily constrain supplies in the market despite adequate physical availability.
The government has therefore made it clear that there is no justification for panic buying or excessive stocking of sugar.
Monthly quota to make way for fortnightly allocation
One of the key changes announced by the government is a fortnightly sugar allocation system from September, replacing the existing monthly quota mechanism.
Under the new system, mills will be required to sell at least 40% of their allocated quantity in the first week, with the remaining quantity to be sold in the succeeding week.
The move is aimed at ensuring that sugar reaches the market more evenly instead of being sold early in the month but remaining at mills or with buyers for extended periods.
The fortnightly system will allow the government to monitor demand and supply more closely, respond faster to changing market conditions, prevent artificial tightening of supplies and release additional quota whenever necessary.
Sugar must move within seven days of sale
The government has also directed sugar mills to ensure that sugar sold is dispatched within seven days of sale.
The combination of fortnightly allocation and mandatory dispatch is expected to improve the movement of sugar from mills to dealers and ultimately to consumers.
The government has also advised bulk consumers not to accumulate stocks beyond their operational requirements, discouraging unnecessary stock build-up and speculative holding.
More sugar entering the market
Additional supplies are also expected to enter the market through several channels.
Refiners have been permitted to sell converted sugar brought under the Advance Authorisation Scheme. At the same time, dealers and bulk consumers holding excess stocks are also offloading sugar.
The government expects these measures to further improve market availability in the coming weeks.
New sugar season to bring further supplies
The supply situation is expected to strengthen significantly with the beginning of the new sugar season.
Sugarcane crushing is scheduled to commence from October 15, with more than 10 LMT of sugar expected to be produced during October.
The government has also permitted mills to sell sugar produced during October without restriction, allowing new-season production to reach the domestic market at the earliest.
Production is expected to rise to around 45 LMT in November, providing substantial additional supplies for domestic consumption.
Even before the new season gets underway, operational mills in Karnataka and Maharashtra are expected to add around 2 LMT during September.
Government assures consumers ahead of festive season
With the festive season approaching, the government has reiterated that there is no shortage of sugar and that all necessary steps will be taken to maintain adequate and continuous availability at reasonable prices.
The recent decline in ex-mill prices, the government said, is already beginning to reflect at the retail level. With tighter monitoring, faster dispatches, more flexible quota allocation and additional production entering the market, the government expects supplies to remain comfortable in the months ahead.
For consumers, the message from the government is straightforward: there is enough sugar in the country, and there is no need for panic buying or excessive stocking.
BI Bureau
