Sugar sale quota for Dec set at 11 lakh tonne

The government today set the open market sugar sale quota for December at 11 lakh tonne compared with 12 lakh tonne for December 2004 and has released an additional 2,16,000 tonne sugar under the levy quota for the month.

The total availability of sugar for domestic consumption in December will be 13.1 lakh tonne.

The development, however, has not impacted the market. "At Rs 1,785 per 100 kilograms (ex-mill), it is difficult for demand to come in and suppliers are seemingly keen to hold on than sell at lower prices. However, a segment of market players may consider the data to be bullish," said Kishore Narne, head-commodities research at Anand Rathi Securities.

The December quota is part of the 3.7 million tonne quota announced in October for the October-December quarter.

In wake of skyrocketing sugar prices a few months ago, the government had clarified that that currently enough stocks are available with mills in the country and, thus, there was no need to require release additional quantity of the commodity.

The sugar sector is under government control and witnesses marketing restrictions such as levy and free sale quota every month. Under the current marketing restrictions, the mills are required to deliver 10 per cent of their production to the government as "levy" under the public distribution system. The remaining 90 per cent is for free sale in the open market during a particular month.

The country's sugar output in the sugarcane year 2005-06 (October-September) is likely to be about 180 lakh tonne compared with 135 lakh tonne last year, according to estimates by the Indian Sugar Mills Association.