Sugar Prices Drop 20% as Retail Market Shows Signs of Easing: Government Report

New Delhi, August 28: The Ministry of Consumer Affairs, Food and Public Distribution announced on Friday that ex-mill sugar prices in the country have decreased by approximately 20%. This decline is now reflected in the retail market as well. According to the government, the impact of price changes in the supply chain takes time to manifest, suggesting that further easing in retail prices may occur in the coming days.

The ministry stated that the government is continuously monitoring sugar prices, stock levels, and supply situations across the nation. Following a recent surge in prices, the government has taken several proactive measures, which are now showing effects in the market.

The ministry indicated that the drop in both ex-mill and retail prices suggests that the recent price hikes were primarily due to hoarding and speculation, rather than an actual shortage.

The government has conducted physical verification campaigns of stocks at sugar mills nationwide. During these inspections, it was found that some mills had more sugar in stock than they had reported. This verification process clarified that there is no sugar shortage in the country, and there is no justification for panic buying or excessive stockpiling.

Additionally, the ministry noted that some sugar mills were resorting to “short selling,” meaning they were releasing less sugar into the market than their monthly quota allowed. Such practices create supply disruptions and exert unnecessary pressure on prices, despite adequate stock levels.

The government also observed that even when sugar sales occurred at the beginning of the month, buyers often did not collect their purchases from the mills until the end of the month, leading to an artificial scarcity in the market. To address this issue, the government has decided to implement a bi-weekly sugar allocation system starting in September, replacing the monthly quota system.

Under the new arrangement, sugar mills will be required to release at least 40% of their allocated quantity in the first week, with the remainder in the following week. Furthermore, the government has mandated that sugar must be dispatched from the mills within seven days after sale.

The government believes that this bi-weekly quota and the mandatory seven-day supply requirement will expedite sugar movement, ensuring that it reaches wholesalers and consumers more quickly while reducing the potential for hoarding and speculation. Large consumers have also been advised not to hold more stock than their actual needs.

The ministry announced that the new crushing season will commence on October 15, with an expected production of over 1 million metric tons of sugar in October alone. The government has also permitted mills to sell the sugar produced in October without any additional restrictions, ensuring that the new season’s sugar is available in the domestic market as soon as possible.

According to the government, approximately 4.5 million metric tons of sugar production is anticipated in November, which will strengthen market supply and help stabilize prices.

The ministry reiterated that there is ample sugar availability in the country, and consumers need not panic or engage in excessive buying. The government will continue to closely monitor the market and intervene appropriately when necessary.