Sugar Stockholding Limit for Bulk Consumers Relaxed to 30 Days, Additional Stock to be Sourced From Imports

The Union Government has relaxed the existing 15 days’ stockholding limit for bulk consumers to 30 days, subject to the condition that the quantity of stock held beyond the existing 15 days’ limit, shall be sourced exclusively from sugar imported under Advance Authorisation Scheme (AAS) and Tariff Rate Quota (TRQ). 

The Ministry of Consumer Affairs, Food & Public Distribution, in a press release, said that the stockholding limit for purchase from the open market shall remain unchanged and will be restricted to 15 days’ consumption only. The Government has taken this decision after detailed consultations with major bulk consumers of sugar. The government has also put in place a mechanism for the declaration and weekly disclosure of sugar stocks every Friday by bulk consumers through the Department of Food and Public Distribution's online portal @ https://foodstock.dfpd.gov.in/

At present, bulk consumers using or consuming more than 10 MT of sugar per month as a raw material for production, consumption or use are permitted to hold sugar stock for a period not exceeding 15 days of their consumption.  Bulk consumers have represented that the existing limit may be enhanced, particularly in view of the upcoming festival season. They also suggested that they may be permitted to directly source sugar from importers holding sugar imported under Advance Authorisation Scheme and Tariff Rate Quota, so as to ensure uninterrupted availability of sugar for industrial consumption without adversely affecting domestic supplies.

The measure is intended to strike a balance between the interests of bulk consumers and the need to maintain stability in the domestic sugar market. It will provide greater operational flexibility to genuine industrial consumers during the upcoming festival season while ensuring that additional stocks are sourced from imported sugar rather than placing undue pressure on domestic stocks.

Retail prices decline, but not as much as ex-mill prices

Meanwhile, the ministry has also claimed that the retail sugar prices have declined by around 10% from their peak (Rs. 65 in August to Rs. 58.50 per kg now). Ex-mill prices have also declined by nearly 25%. The Government observed that the slower decline in retail prices indicates that the benefit of the reduction in ex-mill prices has not yet been fully transmitted through the supply chain to the consumer.

In a joint meeting held today with representatives of ISMA, the National Federation of Cooperative Sugar Factories and sugar trade, Secretary, Department of Food and Public Distribution, underlined that the reduction in ex-mill prices has not yet been reflected fully in retail prices.

The Government made a strong appeal to the sugar trade, wholesalers and retailers to immediately pass on the benefit of the significant reduction in ex-mill sugar prices to consumers, emphasising that the decline in retail prices must keep pace with the correction already achieved at the mill level. The Government called upon the entire sugar value chain to collectively ensure that sugar and sugar-based products remain affordable and within the reach of consumers during the forthcoming festivals.

The ministry said that the Government will continue to closely monitor the availability and prices of sugar in the domestic market and take appropriate measures, as necessary, to ensure adequate availability of sugar to consumers as well as the requirements of the food processing and other industries.