The government had fixed March sugar sales quota for mills at 2.1 mln tn.

Off-take of sugar has been hit over the last two weeks and ex-mill prices have fallen significantly. In global markets too, prices fell $30-$40 per tn in just 20 days.

"There is a general fear that the minimum selling price fixed by the government of India at 31 rupees per kg may get tested if the pressure to sell sugar continues and demand remains subdued," he said.

Consumption of sugar has been affected as some state governments have put restrictions on weddings, parties and advised closure of all malls and picture halls to contain the spread of coronavirus, one of the officials said.

The total number of coronavirus cases in India has risen to 147, according to data from the health and family welfare ministry.

The industry has also asked the food ministry to announce the sales quota for April earlier by Mar 20 and fix a lower quota for the month.

Last year, the government had allowed mills to sell their March quota in April and set a lower quota for April at 1.8 mln tn.

A lower sales quota is necessary next month to prevent a sharp fall in prices and as mills will have unsold March quota that will be carried forward to April, the official said.

"…if there is pressure amongst mills to try and sell as per their quotas, there will be tremendous pressure on ex-mill prices, which will not be in the interest of mills and farmers," the official said.

Low international prices of the sweetener have affected export demand, but the impact is likely to be 'temporary'.

"…it is expected that fresh buying from sugar mills may take place soon because the pipeline would have largely dried up during the last couple of weeks. That should control sugar prices and the buying should help the sugar mills," Indian Sugar Mills Association had said on Tuesday.