In Short:
The government plans to increase sugar sales quota for May by 100,000-200,000 tonnes to control rising prices. Ex-mill sugar prices have gone up in Uttar Pradesh, Maharashtra, and Karnataka due to the end of the crushing season. Retail prices have remained stable, but the government is monitoring the situation closely to prevent any increase in prices for consumers.
Government to Increase Sugar Sales Quota to Tame Prices
The Centre has come up with a sweet solution to tackle the rise in sugar prices- by allocating higher sales quotas to sugar mills for the month of May. In an effort to curb the increasing prices of the sweetener, Union food and public distribution secretary Sanjeev Chopra has announced that the allocation will be 100,000-200,000 tonnes more than last year’s quota for the same month.
Fear of Rising Prices
The government is concerned that the recent surge in prices at the mill level could result in a spike in retail prices if left unaddressed. Ex-mill prices for small and medium-sized grade sugar have witnessed a 2.6%-4.9% increase in states like Uttar Pradesh, Maharashtra, and Karnataka over the past 30 days.
Reasons for Price Spike
One of the reasons for the price hike is the close of the crushing season. With only a few mills in operation in Maharashtra, Uttar Pradesh, and Tamil Nadu, the supply is dwindling, leading to the surge in prices.
Stable Retail Prices
Despite the increase in mill prices, retail prices have remained steady at ₹43-45 per kg for the last four months. The government is keen on preventing any significant price hike at the retail level and is taking proactive measures to address the issue.
Upcoming Sales Quota Increase
In light of the current situation, the government plans to increase the sales quota for sugar mills to ensure that retail prices stay in check. Last year, 2.4 million tonnes of quota were allocated, and this year’s May quota is expected to surpass that amount to meet the rising demand.
Government Intervention
The government closely monitors sugar prices, especially in the lead-up to festivals, to prevent any unjustified price hikes. By regulating the sales quota, they aim to strike a balance between supply and demand, keeping the prices stable for consumers.
