Govt likely to cap retailers’ sugar profit margin amid recent price surge
The government may cap sugar retailers’ profit margins at 5% amid a widening gap between ex-mill and retail prices. Ex-mill prices have fallen 35% to Rs 45 from Rs 70, while retail prices remain elevated, prompting measures to improve price transmission and curb hoarding.
The government is likely to cap the profit margin of sugar retailers at 5% amid a widening gap between ex-mill and retail sugar prices, with retail prices remaining elevated even as sugar prices at the mill level have declined significantly, according to sources.
The proposed measure likely to come as retail sugar prices rose sharply in recent months despite a fall in ex-mill prices. Sugar prices had surged from Rs 50 to Rs 80 at retail shops, according to sources.
However ex-mill prices have corrected 35% from Rs 70 to Rs 45 but the retail prices continue to remain high.
The government has since taken several measures to contain sugar prices and improve domestic availability. These include restrictions on sugar stocks held by dealers and bulk consumers, aimed at curbing hoarding and speculative activity in the market.
The proposed 5% cap on retailers’ profit margin is expected to address the retail end of the supply chain and ensure that the benefit of lower ex-mill prices is passed on to consumers.
The move is likely to be closely watched by sugar mills, wholesalers and retailers, particularly as the government continues to monitor domestic sugar prices and availability ahead of the new crushing season.
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Source : ChiniMandi
