Govt releases 3 lakh tonnes sugar into market; prices set to ease
NEW DELHI: In a move expected to ease sugar prices ahead of the festive season, the government has decided to release about 3-3.5 lakh tonnes of refined sugar from Indian refiners into the domestic market. This follows a recent decision allowing duty-free import of 10 lakh tonnes of raw sugar and permitting processors to sell domestically a portion of refined sugar that was earlier meant only for export.
The decision comes amid concerns over rising sugar prices. Official data shows that ex-mill prices in some regions had climbed from Rs 48 per kg to Rs 58-60 per kg within a few days. According to a government official, this sharp rise was primarily driven by speculation and stockpiling, not by an actual shortage of sugar in the country.
Industry insiders said at least 3 lakh tonnes of processed sugar could enter the market quickly. The additional import of raw sugar is expected to further strengthen supplies and prevent any shortfall.
Already, there are signs of cooling. Ex-mill sugar prices have dropped by nearly 20% over the past ten days. In Kolhapur, a key market, the ex-mill price stood at Rs 48 per kg on Wednesday, while in Uttar Pradesh it was around Rs 53 per kg.
Deepak Ballani, Director General of the Indian Sugar Mills Association (ISMA), said the government's measures to rationalise sugar prices are showing results. "Over the last few days, ex-mill sugar prices have declined by nearly 20%, and we expect this reduction to be reflected in retail prices very soon. There is adequate availability of sugar in the country, and consumers will get the commodity at reasonable prices during the forthcoming festive season," he added.
On Wednesday, the average retail price of sugar was Rs 65 per kg. Industry sources said that with the release of additional stocks, retail prices are likely to soften in the coming days. The government has emphasised that ensuring affordable essential commodities is a priority, and further corrective steps will be taken if needed.
The development is significant as sugar is a daily-use commodity, and price stability is crucial for household budgets. The festive season typically sees increased demand, and timely supply measures are expected to prevent undue price pressure.
Officials also noted that the earlier price surge was not justified by supply fundamentals. "Ex-mill prices increasing from Rs 48 per kg to Rs 58-60 per kg in just a few days showed that speculation and stocking were the main reasons behind the price spike. There had been no shortage," an official said.
The government's decision to allow duty-free import of raw sugar and the domestic sale of refined sugar is part of a broader strategy to maintain buffer stocks and stabilise the market. The refiners, who import raw sugar duty-free and export it after processing, will now be able to sell a part of their output domestically, improving availability without affecting export commitments.
Consumers are advised to expect some time lag before the reduced ex-mill prices translate into lower retail prices, as supply chain adjustments take time. However, the direction is clearly towards moderation, aligning with the government's commitment to price stability and consumer welfare.
