Release of India’s Buffer Stock Brings Down Price of Sugar

The release of an additional quota of of sugar by the Indian government has resulted in a 5 % fall in the price of sugar. The price hovered around Rs 1,700 per quintal. Concerned over the spiraling sugar prices, the Centre had issued notices earlier this month to all sugar mills which had failed to release buffer stock of the commodity in the market. It cautioned that all defaulting sugar mills which have allegedly misused the buffer stock of sugar would face action under the Essential Commodities Act.

The Centre had created a buffer stock of 20 lakh tonnes of Sugar for one year from May 2007 and another stock of 30 lakh tonnes from August 2007 to July 2008. Orders were issued to dismantle the buffer stock, after sugar prices surged 25 percent post June 2008. Sugar has a weight of 3.62 in the Wholesale Price Index (WPI) which is used to calculate the rate of inflation.

The government has also taken other supply side measures to contain inflation. With a view to keep foodgrain prices under check and also to meet the increased demand during the ensuing festival season, the Government has made an ad-hoc allocation of 96,500 tons of wheat to various states. The Government has assured that there is a comfortable stock of wheat at 78.60 lakh tons compared to the buffer stock norms of 40 lakh tons.

Source: Press Bureau of Mumbai

Net News Publisher for World News