Under pressure, govt eases sugar stock limit, asks traders to reduce retail prices

• The government has raised the sugar stockholding limit for bulk consumers from 15 to 30 days ahead of the festival season.

• Stocks covering the additional 15 days must consist entirely of sugar imported under the AAS or TRQ routes.

• Traders have been asked to pass on lower ex-mill prices after retail sugar prices fell more slowly than prices at the mill level.

The government on Friday raised the sugar stockholding limit for bulk consumers from 15 to 30 days, while asking wholesalers and retailers to pass on the sharp decline in ex-mill prices to customers.

The relaxation is subject to the condition that stocks held for the additional 15 days are sourced exclusively from sugar imported under the Advance Authorisation Scheme or the Tariff Rate Quota.

The limit on sugar purchased from the domestic open market remains unchanged at 15 days of consumption.

Bulk consumers must also declare their sugar stocks every Friday through the Department of Food and Public Distribution’s online portal, according to an official statement.

The decision followed consultations with major industrial consumers, whose suggestions were considered as part of efforts to maintain stability in the sugar market.

Businesses consuming more than 10 metric tonnes of sugar a month as a raw material are currently permitted to maintain stocks sufficient for no more than 15 days. They had sought an increase in the limit, particularly ahead of the festival season.

The government said the relaxation would provide genuine industrial users with greater operational flexibility without placing additional pressure on domestic sugar supplies. The extra stocks must therefore be sourced through the specified import routes.

The move comes as retail sugar prices have declined by about 10 per cent to Rs 58.50 from a peak of Rs 65 in August. Ex-mill prices, however, have dropped by nearly 25 per cent.

The government said the comparatively slower fall in retail prices showed that the benefit of lower mill prices had not been fully transmitted through the supply chain.

It urged sugar traders, wholesalers and retailers to reduce prices immediately and ensure that consumers benefited from the correction recorded at the mill level.

The issue was also discussed at a joint meeting involving representatives of the Indian Sugar and Bio-Energy Manufacturers Association, the National Federation of Cooperative Sugar Factories and the sugar trade.

The Secretary of the Department of Food and Public Distribution told participants that the reduction in ex-mill prices had yet to be reflected fully in the retail market.

The government maintained that sugarcane farmers and consumers remained the two central pillars of its sugar policy. It said its approach sought to balance the interests of growers with the need to keep retail prices stable and reasonable.

With IANS inputs