Ex-Mill Sugar Prices Drop 20%, Retail Rates Also Begin To Fall: Govt

India's once-dominant sugar mills are experiencing a 20 percent drop in prices, with retail rates following suit, according to the Ministry of Consumer Affairs, Food and Public Distribution. The government believes the decline will gradually trickle down to consumers as the savings make their way through the supply chain. A stock check across the country found no signs of a sugar shortage, despite some mills holding more than they reported.

The government attributes the price drop to mills selling less sugar than allocated under their monthly quotas, a practice known as "short selling." To address this, the government will implement fortnightly sugar allocations starting September, instead of monthly quotas. Mills will need to sell at least 40 percent of their allocation in the first week and the rest in the second week, with all sugar dispatched within a week of being sold.

India's sugar production has surged by 28.33 percent, and cooperative mills are urging the government to raise minimum selling prices to support farmers. Bulk consumers are advised not to hold onto excess sugar. Sugarcane crushing for the new season is set to begin on October 15, with production forecasted to surpass 10 million metric tonnes in October and around 45 million metric tonnes in November.

This significant supply boost will provide ample domestic sugar for consumption. Mills are also allowed to sell their October production without any restrictions.