ISMA blames speculation for sugar price surge, seeks tightening of stock limit
The industry body has also demanded that the stockholding limit on traders, currently 400 tonnes, should be brought down to 200 tonnes
The Indian Sugar & Bio-Energy Manufacturers Association (ISMA) has blamed speculation for the recent increase in sugar prices, ahead of the Hindu festivals Dussehra and Diwali. The association pointed to a government concession of 1 million tonnes of raw sugar to be imported duty-free as a measure to address the shortage. Despite this, ISMA President Niraj Shirgaokar maintained that the country's sugar production and stock positions are in good health.
He attributed the price surge to speculative buying and lower production due to adverse weather conditions.
Shirgaokar rejected allegations of mills creating artificial scarcity and inflating ex-mill prices, noting that the Ethanol Blending Programme is not competing with food-grade sugar and is not responsible for the current price movement. He stated that the diversion of sugar to ethanol this year, up to July, amounted to 2.9 million tonnes, with an expected total of around 3 million tonnes for the season, within the historical range of 2-4 million tonnes.
The ISMA has also called for a reduction in the stockholding limit for traders from 400 tonnes to 200 tonnes. The president dismissed the diversion of sugar to ethanol as a major factor for the price hike. He added that prices have started to ease following the government's decision to allow duty-free imports of raw sugar. The all-India average retail price of sugar was ₹63.05 per kg on Monday, 29 per cent higher than the previous month's ₹48.73 per kg.
Ex-mill prices have also eased, currently trading at ₹55-56 per kg in Maharashtra and Uttar Pradesh.
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