The government is likely to tighten bulk sugar users’ stock norms by lowering the limit to a 10-day requirement from 15 days now in a bid to augment market supply and check price spiral, an industry source said on Wednesday.
“The government may lower sugar stock holding limit of bulk consumers to 10 days from the current 15 days. It is in the process and a formal announcement should be made soon,” the source said.
Currently, bulk users including confectioners, cola companies and some others, comprise 64 per cent of the total sugar market in the country.
In the recent past, the government has taken a number of initiatives to bring down the price of sugar, which had touched a high of Rs 4,300 a quintal in the wholesale market.
India is expected to produce less than 16 million tonnes sugar in the current season ending September, as against annual consumption of 22-23 million tonnes.
On Tuesday, the government re-introduced weekly sugar release mechanism and directed mills to sell February non-levy sale quota on a stipulated weekly basis.
Sugar mills earlier sold 50 per cent of their monthly quota per fortnight.
“All these steps taken by the government to cool rising sugar prices will definitely impact the market and bring down rates, but by how much I cannot comment,” the source said.
