Govt mulls curbs on sugar sales at mill level to check prices

New Delhi: Government is mulling imposing stock limit for sugar millers and restricting domestic sales by fixing quota on each mill to tame sweetener's retail prices, which are currently ruling as high as Rs 43 per kg.

Food Secretary Vrinda Sarup reviewed the price situation here on July 28 in a video conference interaction with both sugar producing and consuming states.

"The sugar price was discussed. Prices are rising because of tight supply situation created mostly by holding of stocks by millers. We are looking at imposing stock limits on millers too and reintroduce monthly release mechanism," a senior Food Ministry official told PTI after the meeting.

At present, stock holding limits are in place on sugar dealers/traders and not on millers. "The Ministry is looking at checking hoarding at millers' level," the official said.

Currently, there is a stock holding limit on a dealer or trader for up to 500 tonnes for states barring West Bengal. The stock limit for a dealer/trader in Kolkata and extended areas of West Bengal is fixed at 1,000 tonnes.

The official further said that the ministry is also considering reintroducing a release order mechanism, under which the central government decided how much each mill will sell sugar in the open market.

The release order mechanism was scrapped in 2013 when the sugar industry was partially decontrolled. To curb price rise in sugar, the government has recently imposed 20 per cent export duty on sugar and withdrawn cane production subsidy to the mills.

Sugar prices are rising as the domestic production is estimated to decline to 23-23.5 million tonnes in the 2016-17 marketing year (October-September) as against 25.1 million tonnes in the current year.

Earlier during the day, Former Agriculture Minister Sharad Pawar said sugar prices are expected to remain under pressure due to an estimated supply gap of 3.5-4 million tonnes in 2016-17 marketing year.