Sugar supply may improve with quota switch

Pune: The government will introduce a fortnightly sugar allocation system from September, replacing the existing monthly quota, in a bid to improve availability and prevent artificial scarcity in the market.Under the fortnightly quota, sugar mills will be required to sell at least 40% of the allocation in the first week and the remaining quantity in the succeeding week. It was observed that in certain cases, sugar sold by mills at the beginning of the month was being dispatched or lifted by buyers only towards the end of the month, leading to artificial scarcity, the government said in a statement.Sugar is a regulated industry. The Centre has been announcing a mill-wise monthly sales quota to manage sugar supplies and prices in the domestic market. The government expects the fortnightly system will enable it to monitor the demand and supply even closer, respond quickly to changes in market conditions, prevent artificial tightening of supplies, and release additional quota whenever required to maintain adequate availability. "This flexible mechanism will ensure that sugar supply remains aligned with actual domestic demand," the statement said. Ex-mill sugar prices have declined by around 20% in recent days, and retail prices have also started coming down as a result of a series of measures, the government said. "The downward trend in ex-mill and retail prices reflects that the sharp spike in prices witnessed recently was primarily on account of hoarding and speculation, although the country carries adequate stocks of sugar," it said. Revealing the findings of its nationwide physical verification of sugar stocks with the mills, the government said the physical verification has reaffirmed the comfortable availability position.

from Economic Times https://ift.tt/DyQHZ8T