Sugar mills can sell 2.1 million tonne of the sweetener in the open market in the current month, higher than the April quota of 1.8 million tonne, according to a food ministry order.
The quota also includes additional quantity given as incentive to mills for achieving more than 75 per cent of their export target and also for producing ethanol from B-heavy molasses instead of sugar, it said.
The food ministry has allowed 534 mills to sell a total of 2.1 million tonne (MT) in this month, the order said.
Any violation of this order would attract penal provisions under the Essential Commodities Act, 1955, it added.
The wholesale sugar prices have remained sluggish and in fact below the cost of production throughout the year because of surplus domestic production.
The government has raised its sugar production estimate for 2018-19 (October-September) to a record 32.5 MT from 31.5 MT estimated in March, similar to what was achieved in the previous year.
The production, however, is expected to be higher than the annual domestic requirement of 25-26 MT.
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