Sugar Price Hike: Retail Rates Rise 8%, Government Checks Mill Stocks and Sets 400-Tonne Limit

In the light of the above, there have been efforts to control the prices at three different hierarchical levels: checking the stock of sugar in sugar mills, imposing stock limits on traders and distributing the sold sugar rapidly to the market.

On 24th July, the government allowed a physical check of the stock of sugar in all sugar mills in the country. This has been done by teams from both central and state governments until 14th August.

The main purpose has been to ensure that there was enough sugar in the sugar mills compared to the claims made by them. The report of the survey will soon come out and will reveal the present market situation.

The objective was to determine whether mills actually possessed the amount of sugar they had claimed. The investigation report is awaited, which will help understand the market situation.

Sugar traders have also been tightened. A maximum stock limit of 400 tons has been set for them until November 30th to prevent black marketing before the festive season.

Nevertheless, prices continue to rise. Furthermore, rules have been put in place to ensure that sugar sold from mills reaches the market quickly.

Dealers, agents, or wholesale consumers purchasing sugar from mills must pick it up within seven days. Mills will also not be able to store sugar on their premises for long periods after sale.

The government believes that showing sales at the beginning of the month and holding sugar at the mills underrepresents the actual supply, fueling inflation. This rule will also remain in effect until November 30th.

Only physical verification will reveal the truth. If mills receive sugar close to the declared quantity, the price increase could be due to an actual shortage or the possibility of reduced supply in the coming months.

However, if there is a discrepancy between declared and actual stocks, the suspicion of stock concealment or supply disruptions will increase.

The National Federation of Cooperative Sugar Factories has demanded that physical verification data be made public. The Federation believes this will curb speculation. The government is also urging mills to begin crushing early so that new sugar can reach the market quickly.

Typically, a sufficient quantity of new sugar begins arriving in the market in December. Therefore, the stockpiles during October-November and the speed of arrival will be crucial for prices.