The government may consider more duty-free sugar imports and bringing back stock limits on sugar mills this season if prices continue to rise in the run-up to Diwali, a senior government official said on Wednesday.
The government is looking at the possibility of allowing dutyfree imports barely weeks after it increased the import duty on sugar to 50 per cent from 40 per cent, as prices have started rising.
Wholesale sugar prices in Delhi had shot up to a record high of ₹41 a kg earlier this month due to pent-up demand after implementation of the Goods and Services Tax.
Though wholesale prices have since eased marginally to ₹39.50 a kg, retail prices are still hovering around ₹43-45.
Prices in both retail and wholesale markets are expected to rise again as sugar supplies are tight this season and demand is seen increasing ahead of the festival season.
To keep prices under check, the government had permitted dutyfree import of 500,000 tonnes of raw sugar this season.
It has asked sugar mills to step up supplies and start crushing early for the next season. It has also asked states to ensure that the stock limits on sugar traders are stringently implemented, the official said.
It is now looking at bringing back stock limits on sugar mills.
The government had last year made it mandatory for mills to offload sugar from their stocks in the September-October period to rein in prices.
Maharashtra extends cap
Meanwhile, Maharashtra has extended the stock limit on sugar until October, a government release said. The State government had imposed the stock limit on sugar in May 2016. The government continues to impose stock limits on sugar due to concerns over supply shortages ahead of the festival season.
According to the order, wholesalers and retailers in the State will not be allowed to hold more than 500 tonnes and 50 tonnes of sugar, respectively, for a period of one month after they receive the stocks.
The government has also asked sugar mills to advance the crushing of sugarcane to early- or midOctober to maintain adequate supply of sugar in the market.