Unlike tomato and onion prices, the government sits in a comfortable position regarding sugar prices and is all set to keep it under check during the upcoming festive season. In view of strong demand for sugar considering upcoming festivals of Onam, Raksha Bandhan, and Krishna Janmashtami, the government has made an additional allocation of 2 lakh metric tonnes (LMT).
This 2 LMT will be added above the current 23.5 LMT already allocated for the month of August, 2023. The additional sugar in the domestic market will ensure reasonable prices all over the country.
The government has already kept sugar prices in check despite the rise in international price of sugar. The international prices of sugar increased by around 25 per cent in the last one year.
However, the average retail price of sugar in India is about Rs 43.30 per kg and is likely to remain in range. Moreover, there has been less than 2 per cent annual inflation in the country in sugar prices in the last 10 years. During the current sugar season (October-September) 2022-23, India is estimated to produce of 330 LMT sugar after diversion of about 43 LMT for ethanol production.
Domestic consumption is expected to be around 275 LMT in the current year. As per government sources, India has enough stock of sugar to meet its domestic demand for the remaining months of the current sugar season – 2022-23. There will be optimum closing stock of 60 LMT available at the end of this season – towards the end of September. Government estimates said that this stock would be enough to meet over two months of demand.
In June, India had put a cap on sugar export due to speculation of weak monsoon due to El Nino. The El Nino year is identified with weaker monsoon due to warming of sea surface temperature of the Pacific Ocean. Weaker monsoon can dent production of sugar. Meanwhile, India is the second largest producer and exporter of sugar in the world.
Sweet deal
- 25% rise – in international prices of sugar in 1 year
- 43.30 per kg – Average retail price of sugar in India is likely to remain in range
- Less than 2% – annual inflation in sugar prices in the country (in 10 years)
Enough stock to meet domestic demand: Govt
As per government sources, India has enough stock of sugar to meet its domestic demand for the remaining months of the current sugar season – 2022-23. There will be optimum closing stock of 60 LMT available at the end of this season – towards the end of September. Government estimates said that this stock would be enough to meet over two months of demand.
