Government asks mills to ensure strict compliance of monthly stock holding limit orders for sugar sales in domestic market

The government has strictly asked all sugar mills to ensure the strict compliance of monthly stock holding limit orders for the sale of sugar in the domestic market and the accurate submission of data in the NSWS portal.

In a communication to sugar mills, the DFPD (Department of Food and Public Distribution) stated that it has observed that a few sugar mills are not adhering to the monthly stock holding limit. They are either selling a higher or significantly lower quantity (less than 90%) than their monthly quota. Such deviations from the monthly stock limits by sugar mills could distort the domestic sugar market and disrupt the comprehensive measures implemented by the government in the interest of the sugar industry. Consequently, this might lead to the accumulation of cane price arrears for farmers.

The DFPD has directed sugar mills to adhere to the guidelines. In a letter to the mills, it emphasized, “All the sugar mills have to ensure strict compliance of monthly Stock holding limit orders for sale of sugar in the domestic market. Sale of sugar quantity in excess of monthly release quota is violation of the Essential Commodities Act and suitable penal action will be taken against the non-compliant mills.”

“Each sugar mill is expected to sell at least 90% of the monthly quota allocated in the respective month. In case, any sugar mill is finding it difficult or unable to sell full quantity of its monthly quota for a particular month, same shall be intimated by the mill before 15th day of every month clearly mentioning the possible quantity to be sold. For example, in case a sugar mill has been allocated monthly sale quota of 100 MT, out of which mills is estimating its sale of only 80 MT, the same may be intimated to this Directorate,” the letter further added.

As per the government, it has been decided that in case, a mill fails to inform the quota it expects to sell and does not sell the quantity allocated, the difference in the quantity allocated and the quantity sold will be reduced from the calculated quota of the following month. For example, the mill which sells only 80 MT out of 100 MT quota during a month, and its eligible quantity of quota in the next month, for which quota allocation is under consideration is 120 MT, its quota for the following month shall be restricted to 80% of the eligible quantity, i e. 96 MT only.

The government has also noticed disparities between the sales data for June 2023 submitted by many sugar mills in the NSWS portal and the sales data as per GSTR1 of June 2023. Consequently, the government has urged sugar mills to accurately report sales/dispatch data on the NSWS portal. Strict action will be taken in cases where incorrect information is provided on the NSWS portal regarding sugar and ethanol.

Prakash Naiknavare, Managing Director of the National Federation of Cooperative Sugar Factories, also urged the mills to report accurate sales data. While speaking to ChiniMandi, he said, “It is quite understandable that the Government’s priority is to assist all mills across the country in obtaining an equal opportunity to sell sugar while also maintaining domestic prices at a reasonable level. In light of this, all mills must report accurate data of sales/dispatches on the NSWS portal in their own interest.”

In the event of non-compliance with the instructions outlined in the letter issued by the government, strict penal action under the provisions of the Essential Commodities Act, 1955, as deemed appropriate, will be taken against such sugar mills.

Click here to read the official letter


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