NEW DELHI – The Centre may set the sugar sale quota for May at 2.1 mln tn, higher than the April quota of 1.8 mln tn, a government source said.

"Sale quota has been fixed keeping in mind the summer demand during May…And 2.1 mln tn is the average consumption for every month," the source said.

The government has been fixing the quantity of sugar available for sale on a monthly basis to support prices and help mills clear cane arrears, which has hit 240 bln rupees as of today.

Sugar prices have remained below the cost of production throughout this year due to a glut in the domestic market. 

The government also raised its sugar production estimate for 2018-19 (Oct-Sep) to 32.5 mln tn from 31.5 mln tn estimated in March, a senior official said.

With carryover stock from this season seen at about 12.42 mln tn, the total supply in 2018-19 is pegged at 44.92 mln tn, way higher than the estimated consumption of 25-26 mln tn. 

In February, the government increased the minimum sale price of sugar by 2 rupees a kg to 31 rupees a kg to help mills get better realisations and pay farmers on time.