Centre mulls stock limit on sugar if full disclosure doesn't come by Oct 17

Additionally, the government is likely to extend the current restrictions on sugar exports indefinitely after October 31

The Centre may consider imposing stock limits on sugar trade if all entities engaged in the business don’t disclose their inventories on the official portal by Tuesday (October 17), a senior official said.

The government will initially wait for states to take action against non-compliant entities. Thereafter, if the disclosures are found unsatisfactory, a blanket stock limit may be imposed, the official added.

Earlier, on September 23, the food ministry had issued an order directing all sugar stakeholders -- wholesalers, retailers, big chain retailers, and processors -- to weekly update their stock position on its website.

“We are collating data on those who have declared their sugar stocks and those who haven’t. There are some big names who have shied away from this process, and hence further action is being considered,” the official said.

Separately, the current restrictions on sugar exports could be extended indefinitely. “At present, sugar exports are under ‘restricted’ category till October 31, and after that we will extend the same indefinitely,” he added.

Both measures are ostensibly meant to control sugar prices, which have shown a rising trend in recent weeks on the back of an anticipated decrease in production.

The government expects sugar production in the 2023-24 sugar season to be 30-31 million tonnes, which will be sufficient to meet the domestic demand of around 28 million tonnes, the official said.

This estimate accounts for sugar being diverted for ethanol production. In the previous season, which ended on September 30, India produced around 33 million tonnes of sugar.

India started the 2023-24 season with an opening balance of 5.6 million tonnes of sugar, which was marginally less than the 6.3 million tonnes of sugar opening stocks last season.

India’s sugar production is projected to drop this year due to an unusually long and dry August month.

On the warning given to sugar mills and traders on disclosure of their stocks, news agency PTI reported on Sunday that the government had given a final call to all legal entities engaged in sugar trade to declare their stocks on the food ministry website by October 17.

“Various instances have been reported to the Directorate of Sugar and Vegetable Oils, where many of these legal entities are having possession of a substantial quantity of unreported sugar stocks,” the ministry said in a letter to all stakeholders.

There are cases where these entities are not updating their sugar stocks on a regular basis, it said, adding this not only violated the regulatory framework in place but also disrupted the overall sugar market equilibrium.