Anticipating a rise in demand for sugar in the upcoming summer months, the Government on Tuesday increased the quota of sugar being released by approximately 2 lakh tonnes. With this increase, the total quantity of sugar being released into the markets now rises to 24 lakh tonnes for April 2023.
Earlier this week, reports stated that the price of sugar has risen by over 6% in the country in the last two weeks. A Reuters quoted industry officials as saying that sugar prices look set to rise further as production is set to fall and the demand for sugar is likely to peak during summer months. The officials quoted added that the rise in local prices of sugar will boost the margins of sugar companies like Dalmia Bharat Sugar, Balrampur Chini, Dwarikesh Sugar, and Shree Renuka Sugars.
This improvement in margins will help the sugar companies make timely payments to sugarcane farmers, the report added.
However, this rise in the price of sugar could further fuel food inflation and force the government to disallow any additional export of sugar.
Tuesday’s move by the government to release an additional quota of 2 lakh tonnes into the markets should rein in the rise in prices to some extent.
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