ISMA President Niraj Shirgaokar said the recent rally in sugar prices was not supported by fundamentals, with speculation and hoarding contributing to the increase. ISMA said it sees no sugar shortage in the country.
He added that sugar mills were not responsible for creating artificial scarcity or pushing up ex-mill prices. He said prices have started easing after the government allowed duty-free imports of 1 million tonnes of raw sugar.
He said sugar stocks are expected to stand at around 35 lakh tonnes by the end of September. Mills are likely to begin operations around October 15 and produce 10-12 lakh tonnes during the month, against estimated October demand of 24-25 lakh tonnes, he added.
According to ISMA, bulk buyers begin stocking sugar one-to-two months in advance, adding to the upward pressure on prices. The industry body said the current stock position is comfortable and that the rise in retail prices is not due to any shortage or unavailability of sugar.
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Sugar prices & stocks: What’s the issue?Sugar prices have risen sharply, from ₹48.18/kg on July 20 to ₹63.12/kg as of August 23, amid tighter domestic supplies and rising demand as the festive season set to start. The government has attributed the increase to lower-than-expected production, weather-related crop damage, global supply concerns and hoarding, while rejecting ethanol diversion as the main cause.
Domestic sugar stocks are estimated at 3.5-3.9 million tonnes, below the government’s 6-million-tonne normative buffer. With supplies tightening ahead of the new crushing season, the Centre has allowed duty-free imports of 1 million tonnes of raw sugar until October 31, its first such move in nearly a decade.
The government has also tightened stockholding norms for bulk consumers from September 1, limiting them to 15 days of consumption, in an effort to curb hoarding and speculation ahead of the festive season.
Also read: India’s sugar stockpile set to shrink as output estimate falls: Govt
What opposition said
Congress president Mallikarjun Kharge questioned the government over sugar prices, saying stocks were at a nine-year low and asking why India had halted exports and was now importing 1 million tonnes duty-free. He also questioned the continued diversion of sugarcane towards ethanol amid the domestic supply squeeze.
(With inputs from PTI)