Govt. Fixes 21.50 LMT Monthly Sugar Quota for Sale in December 2019

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ChiniMandi Delhi, 29th November 2019: In a notification issued on 29th day of November 2019, the food ministry has allocated 21.50 LMT monthly sugar quota for December to each of 535 mills in India along with added incentivized quota to those mills who have completed their export targets under MIEQ Quota. The allocated quota of December 2019 is 2 LMT higher than the preceding year’s December month quota that stood at 19.50 LMT.

The group sugar producing companies having more than one sugar producing units may maintain the stock as defined in Para (1) of this Order, either unit wise or for the group as a whole.

The sugar-mill wise Maximum quantity of white/refined sugar for domestic sale and dispatch during the month of December end notional stock for the month of October 2019 has been worked out on the basis of the following parameters:

The December, 2019 stock holding limit has been worked out on the basis of gibing 100% weightage to the month end notional stock for the month of November, 2019.

The notional month-end stock for the month of December 2019, has been worked out on the basis of month end stock for October, 2019 (as reported on P-II) adjusting the difference in the actual and the estimated production of October, 2019 (received from sugar mills) and subtracting actual release for November 2019.

Incentive in lieu of estimated sugar sacrificed for the month of November, 2019 (received from sugar mills) for producing ethanol from B heavy molasses/sugarcane juice/sugar syrup/sugar has been given for issuing stock holding limit Order for the month of December, 2019.

Show Cause Notices (SCNs) was issued to the sugar mills for violation of stock holding order for the month of July 2019. Except 3 sugar mills, replies to SCNs have been received from other sugar mills which are under examination. The excess quantity sold by the said 3 sugar mills have been deducted from the proposed allocation in the month of December 2019.

In the previous month the Govt. allocated 20.50 lakh MT monthly sugar quota in November 2019 to 535 mills in the country. Since the recent couple of days, the sugar millers continued witnessed scanty demand in the month of November. With the delayed monsoon the festive demand remained slow and was effecting the sugar consumption directly. With the schedule of majority of mills to commence crushing of sugarcane and the scanty demand situation already put up a tough time for the Indian Sugar Industry to reduce the stock piles after witnessing a “not so sweet Diwali” this year!

As per the sources in the market, the sugar industry is quite horrified with such excessive quota due which sugar millers are already anxious to reduce the stockpiles and increase the cash flow for the new ongoing sugar season.  It is likely that stocks would start getting sold under the MSP of sugar to attain cash flows.

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