Chandigarh: Though the withdrawal of 5 per cent VAT on sugar is expected to bring down the wholesale price of sugar by Rs 200 per quintal (Rs 2 per kg), it may not bring much relief to the consumer.

Sugar is trading at Rs 3,800 - Rs 4,000 per quintal across different cities in the state. With the withdrawal of VAT, the wholesale prices are expected to decline to Rs 3,600- Rs 3,800 per quintal.

However, till July, sugar was being sold at Rs 3,300 - Rs 3,400 per quintal.

Sources in the trade said sugar prices were high because of high demand whereas the quantity of sugar released by the government was less.

“From June to August, the Government of India released 45 lakh quintals of sugar. This is too less, especially when the festival season is on,” said Pritam Singh Arora, president of the Punjab Wholesale Sugar Dealers Association.

Welcoming the withdrawal of VAT, Jagjit Singh Arora, president, Ludhiana Wholesale Sugar Dealers Association, said the sugar price would now tumble by Rs 2 per kg.