New Delhi: To meet the peak festival demand and check price rise, the government on Thursday decided to release higher quantity of sugar at 40 lakh tonnes (LT) in the open market in the next two months.

The sugar sector is controlled by the government. The quantity of sugar that mills should sell in the open market and through ration shops is decided by the Food Ministry.

"The central government has decided to make available a quantity of 40 lakh tonnes of non-levy quota (meant for open market sale) for October and November, 2012," an official release said.

It has also allotted 3.96 lakh tonnes of sugar to states for sale via ration shops in these two months. While 2.13 lakh tonnes should be sold in October, sales of 1.83 lakh tonnes should be undertaken in November, it said.

The Food Ministry has released higher quota to meet the peak festival demand during Dussehra and Diwali and also check prices, which have rallied in recent months in the wake of an expected production shortfall in the next year.

In last three months, the ministry had released about 17 lakh tonnes of sugar every month for sale in the open market.

According to the statement, millers are required to sell the entire allocated sugar quota in the open market by November 30.

Early this month, Inter Ministerial Group (IMG) on inflation, headed by Chief Economic Advisor Raghuram Rajan, had suggested the food ministry should release more quantity of sugar in the open market and allocate the sweetener for six months instead of the present quota system of three months.

The IMG members had expressed concerns over the near 20 percent increase in retail prices of sugar in the domestic market in the last three months, while rates in the global markets were moderating.

Retail price of sugar is in the range of Rs 35-40 per kg in most parts of the country.

The country has produced 26 million tonnes of sugar in the 2011-12 marketing year (October-September), against the annual demand of 22-23 million tonnes.


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