The food ministry has warned sugar mills against selling the sweetener below the minimum price in the domestic market, a senior government official said today. It has asked state governments to take action against defaulting mills under the provisions of the Essential Commodities Act, 1955.
The Centre has fixed the minimum selling price of sugar at 31 rupees per kg.
"All sugar mills are advised for strict compliance of monthly stock holding limit and minimum selling price," the ministry said in a letter, seen by Informist.
"…In case it is found that any mill has not complied with the directions, the excess quantity sold by mills along with some additional quantity would be deducted from monthly release quota from March onwards and further necessary action as deemed fit would be taken against such sugar mills."
The warning follows mills in Maharashtra resorting to distress sales since January due to weak demand. While mills show sales at 31 rupees on paper, they either deliver more than the tendered quantity of sugar or sell at a lower price.
Mills were selling sugar below the government-mandated price as they also had to make cane payments to farmers.
The Centre had introduced minimum selling price of sugar in June 2018 to prevent cash loss to mills, and has been fixing the maximum quantity of sugar available for sale on a monthly basis to support prices and help mills clear cane arrears.