To control the falling prices of Sugar, the government has once again set a curb on the amount of sugar that can be sold in the market. As the demand supply market fluctuates, the prices of the sugar has gone down due to the large availability of sugar in the market.
The sugar prices have jumped 3.5% since the government doubled import duty on sugar to 100%. This move by the government has brought positive response from the millers, Since it would fetch good prices later which are dropping down due to the excessive supply and dumping in the market. To control the situation before, government had to put import duties on the import of sugar. The sugar prices have hiked up by 3.5% since the government doubled import duty on sugar to 100%.
As per the new quota imposed on sugar sales, in February mills must maintain sugar stock of not less than 83% of the closing stock on the last day of January in addition to sugar produced in February, less sugar exported during the month. For March, sugar mills have to keep not less than 86% of the closing stock on the last date of February, in addition to sugar produced during March less sugar exported in the month.
BB Thombre, president of Western India Sugar Mills Association (WISMA), said the decision will help increase liquidity of sugar mills, enabling them to clear the cane payment arrears.
That is because sugar mills pledge their sugar with banks to take loans for operation and cane payment; and this loan is in proportion to the ruling market price of sugar. "As sugar prices increase, lending banks will upgrade sugar valuation, increasing liquidity of the sugar mills," Thombre said.
