To make sugar adequate during the festival season, the central government has decided to make available four million tonnes of non-levy (free sale) sugar for the open market in the months of October and November.
Non-levy sugar is that output of mills which is not taken for supplying ration shops; however, the quantity mills can sell in the open market and by when are also decided by the government. It has said of the total quantity allocated (for sale), mills will have to sell at least 45 per cent in either October or November.
It has specified this in the wake of the sharp increase in the retail price in recent months. The department of consumer affairs says the average retail price has risen by Rs 3 a kg since August 1, to Rs 40 per kg, because of strong demand.
Major Hindu festivals, including Diwali, fall in these two months. For July to September, the government had allocated 4.5 mt of sugar for free sale. This time, almost the same quantity has been allocated for sale in just two months.
In addition, mills will have to provide 396,000 tonnes for sale through ration shops in October and November.
“This is also a big increase over the last quarter and has also been made available keeping in mind the festival season,” a senior official said. He said in the coming months, the government might shift towards a quarterly sugar quota release mechanism, to enable mills to better plan their sale and dispatch routines.
Recently, a proposal from the food ministry to increase the price at which sugar is sold by the government in ration shops was deferred keeping in view the festival season.
Sugar production in the 2012-2013 crop marketing season that will start from October has been estimated to be 24.5 million tonnes, down 6.4 per cent from this year.