To ensure sugar prices don’t rise sharply in the festive season beginning next month, the central government has asked all millers to provide details of quantities sold to traders and wholesalers in each of the past four months in a specified format, according to an order seen by HT.
Availability was sufficient and crushing of fresh sugarcane harvests would begin from October, said millers and industry associations who were sent the order. However, a cautious government fears possible hoarding to raise prices in the world’s biggest consumer of the sweetener amid soaring demand in the festival season, according to an official, who declined to be named.
Millers have to declare quantities sold to each client from May through August, including to traders, wholesalers, chain retailers and supermarkets, according to the order issued under clause 5 of the Sugar Control Order.
“The government wants fair trade, but we want to ensure no hoarding can happen,” the official said. Sugar is considered an essential item because people are sensitive to its prices.
To crack down on hoarding, the government has specified a submission format of sales data, which should include name of buyers, their tax records and phone numbers.
A patchy monsoon may impact sugarcane output in the world’s second-largest producer of the commodity, according to industry forecasts. Prices of sugar have risen by about 3% over the past month, according to official data, although they are still nearly 40% lower than global rates. On September 5, mill prices touched a six-year high.
The government has called for the sales details “in order to have complete data of stocks with traders, dealers, wholesalers and processors to ensure availability of sugar at reasonable prices in the country,” the directive to millers said.
Battling high prices, the government has regulated trade in most food items to cool consumer inflation, which eased in August to 6.83% from 7.44% in July, a 15-month high. India has banned rice and wheat shipments abroad, levied a 40% duty on onion export and allowed duty-free imports of pulses.
“There is enough sugar for the season. Last season’s production was 32.8 million tonne, while domestic consumption stands at about 27 million tonne. The government is unnecessarily worried,” the proprietor of a cane-crushing unit said on condition of anonymity, adding that export of 6 million tonne was equal to the size of carry over stocks from last year.
India may prohibit sugar export or curtail shipments considerably in the new season beginning October 1, in addition to other measures to boost domestic availability and keep prices stable, HT reported on September 9.