Sugar production to rise to 18.5 million tonnes in 2009-10 crop year

Taking into considering the downward movement of sugar prices over the last four months and improved outlook for production next year,  the government may lift stock holding limit for sugar in July.

At present, bulk users of sugar, such as ice cream and beverage manufacturers, are allowed only a 15 days' stock of their requirement.

According to a senior food ministry official, given that sugar prices had eased, the stock limit rule on bulk buyers could be done away with and call on the issue could be taken by July.

The 15-day stockholding limit on bulk consumers was first introduced in August last year to curb demand for domestic sugar and control rising prices, but in February this year, the limit was reduced to 10 days stock as sugar prices touched nearly Rs50 a kg in January.

The restriction on bulk users forced them to go in for imported sugar to meet their requirements. On 21 May, the stock holding limit was relaxed with bulk consumers now being allowed to keep 15 days sugar stocks again.

According to food ministry officials, the stockholding limits on bulk users is one of the major factors for bringing lower sugar prices, which is currently ruling at Rs32 a kg in Delhi.