Govt imposes stock limit on mills for Sept, Oct to check sugar prices

New Delhi: The government on Tuesday imposed inventory level limits on sugar mills in an attempt to keep prices under control during the upcoming festive season.

Sugar mills will not be allowed to hold more than 21 percent of their output in stocks by the end of September, and they have to bring down stock level to 8 percent of output by the end of October, Food Minister Ram Vilas Paswan said on twitter.

"We have imposed stock limits on sugar mills for the month of September and October to keep prices under control," Paswan tweeted.

For keeping prices of sugar under control during the festival months of Sept. & Oct. 2017 stock limits have been imposed on sugar mills. — Ram Vilas Paswan (@irvpaswan) August 29, 2017

Sugar production in India, the world's second largest producer, is estimated to decline to around 21 million tonnes in 2016-17 season ending September from 25 million tonnes in the previous year.

Sugar demand is estimated at 24-25 million tonnes annually.

The minister said that the stock limit for September has been kept at 21 percent of the total sugar available with the mills during entire 2016-17 marketing year (October- September).

The stock limit for October will be 8 percent of the total sugar availability during the current marketing year, the minister said.

The measure is aimed at preventing mills from artificially withholding sugar in storage in order to push up prices during the high demand festive season of September and October.

Sugar prices are ruling at more than Rs 40 per kg in the retail market while branded sugar is available at Rs 50 per kg.

The government last month had increased import duty on sugar to 50 percent, up from 40 percent, to restrict cheap inward shipments and maintain domestic prices. 

With Agency Inputs