The central government has decided to extend the increase in stockholding limit for bulk consumers of sugar from 15 days to 90 days for a further period of 180 days, a move that would increase sugar prices in the festival season.
A government press release today said the decision has been taken in view of the availability and decline in prices of sugar in the domestic and international markets.
The decision would help ensure availability of sugar in the ensuing festival season, it said.
Indian Sugar Industry has estimated that over 60 per cent of the non-levy (freesale) sugar sold in the market is consumed by the non-household (commercial) sector. Out of this, over 50 per cent is the share of the confectionery, beverage, hotel etc industries, which are called bulk consumers.
The stockholding limit on these bulk consumers was imposed to encourage them buy less of domestic sugar and import more sugar for meeting their requirements.
The validity of stockholding limit of 15 days requirement for domestically produced sugar has expired on 18 August and these bulk consumers can now stock domestic sugar up to 90 days' requirements.
This is expected to push up sugar prices once again.