iGrain India - New Delhi. The Central Food and Public Distribution Department has declared a free sale (domestic sale) quota of 25.50 lakh tonnes of sugar for June 2024, which is 2 lakh tonnes or 8.5 percent more than the quota of 23.50 lakh tonnes fixed for June 2023, but 1.50 lakh tonnes less than the record free sale quota of 27.00 lakh tonnes fixed for May. A quota of 24 lakh tonnes was fixed in May 2023.
The interesting fact is that despite the record free sale quota being declared, the price of sugar remained strong at a high level in May because its demand and consumption increased significantly due to the general elections and severe heat.
The election results are going to be announced on June 4 and hence the government does not seem to be very sensitive now.
Monsoon is expected to arrive and good rains are expected in June, which may reduce the temperature and the demand for sugar at high prices may weaken somewhat.
According to industry analysts, due to the scorching heat of May, not only the demand for sugar for the manufacture of ice cream and cold drinks increased, but its consumption also increased for election rallies and public meetings.
Due to the early end of the sugarcane crushing season, the supply of sugar in the market decreased. According to millers and analysts, the domestic market price of sugar is expected to remain high and strong even during June 2024. The summer season may continue in northern India, which will lead to good demand for sugar.
The government increased the free sale quota of sugar for May and June with the aim of controlling the domestic market price, but it is doubtful whether this objective will be achieved.
Earlier, a free sale quota of 25 lakh tonnes of sugar was announced in April 2024, 23.50 lakh tonnes in March and 22 lakh tonnes in February.
The government's effort to reduce the price of sugar is not being successful. Sugar production has been sufficient to meet domestic demand and need. However, this time the domestic consumption of sugar is estimated to increase to 290 lakh tonnes.