Sugar prices fall 25 percent at factory level, govt eases storage rules
Factory-level sugar prices have dropped about 25 percent, and the government has raised storage limits for bulk buyers, with retail prices already down 10 percent.
Concerns had grown over rising sugar prices during the festive season, with fears that higher consumption would push prices up further. But sugar prices at the factory level have now fallen by about 25 percent, raising hopes of further relief in the retail market.
Given the current state of the sugar market, the central government has changed storage rules. The storage limit for companies buying sugar in bulk has been increased from 15 days to 30 days.
However, a condition applies to this extra stock. If sugar is to be stored for more than 15 days, that extra stock must be imported sugar, bought under the Advance Authorization Scheme and Tariff Rate Quota. For sugar bought in the open market, the storage limit remains 15 days as before.
In August, the retail price of sugar had reached about Rs 65 per kg. It has since fallen to about Rs 58.50 per kg, a drop of about 10 percent in retail prices.
The government has said that the roughly 25 percent fall at the factory level has not yet fully reached customers. Traders and wholesale sellers have been urged to pass on the benefit of the lower factory-level prices to customers.
Sugar consumption rises during Ganeshotsav, Navratri and the upcoming festivals, so this price fall could matter for customers. If the fall seen at the factory and wholesale level is fully reflected in the retail market too, sugar prices could drop further in the coming days, offering some relief to customers hit by higher prices this festive season.
