Government measures break sugar price rally; Prices plunge nearly 27% to Rs 5,100/quintal ex-mill
Sugar prices have softened after government measures to curb hoarding and improve supplies. Prices fell from ₹62 to ₹51-52/kg ex-mill in Maharashtra. The government ordered release of unsold August quota, approved 1 MMT duty-free imports, and expects additional supplies to ease prices.
Sugar prices have softened across the country following a series of measures taken by the Government aimed at improving market availability and ensuring adequate supplies.
Amid rising sugar prices, the Government has maintained that there is enough sugar stock in the market to cater to the domestic demand. However, the price rise was an act of unnecessary speculation in the market due to weather woes and illegal hoarding.
The Government acted with alacrity and imposed a slew of measures aimed at liquidating any hold up sugar stocks and infusing it back to the market. The Government imposed stockholding limits on bulk consumers, dealers etc.
According to sources, this particular measure has freed up sugar stocks from some big bulk consumers into the market, thereby improving the supply dynamics and cooling off prices.
The sugar prices, which breached Rs 62 a kilo ex. Mill (South Maharashtra), are trading at around Rs.51-52 a kilo ex-mill in Maharashtra and Rs.53 a kilo wholesale at Kolkata, which is an important sugar gateway to North-eastern States.
These lowered prices will soon reflect in retails prices as well within the next 3-5 days, giving a much needed breather to the households.
Raids are continuing across the country to check illegal hoarding & non disclosure of sugar stocks. More than 1000 centres have been raided or inspected across the country as part of the strict measures taken by the Government.
The government has directed sugar mills that have not yet sold their allocated August sugar quota to release the stocks into the market. The move is expected to increase near-term availability and help keep prices under control.
On 21st August, the Government allowed duty-free sugar import of 1 MMT sugar.
According to trade sources, three to four shipments carrying 70-80 thousandtonnes of sugar have left ports of exporting nations and are bound to hit Indian ports by mid-September to the end of September. The sugar will be refined swiftly and reach the markets subsequently. The increased inflow is likely to further ease supply pressures and provide stability to domestic prices.
In addition, around 3 to 4 lakh tonnes of sugar will be refined and subsequently supplied to the market from the Indian ports, adding to the available stock in the coming weeks.
Market participants expect the combined impact of the release of unsold August quota, incoming shipments and additional refined sugar supplies from the ports to improve availability across major consuming centres.
The government maintains a hawkish stance on the entire sugar scenario, and with the festive season approaching, the policy would be to ensure adequate sugar is available in the market and at reasonable prices to cater to the festive demand without any hindrance or botheration to the household consumers.
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Source : ChiniMandi
