Sugar prices soar to Rs 42/kg; FM holds inter-ministerial meeting on banning futures trading

Zee Media Bureau

New Delhi: Finance Minister Arun Jaitley on Monday held an inter-ministerial consultation on imposing ban on sugar futures trading in an effort to curb speculation and check price rise of the sweetener during festival season.

Minister of State for Food C L Chaudhary, Secretaries from Food, Consumer Affairs, Agriculture and Finance Ministries were present in the meeting. The meeting comes in the backdrop of the Food and Consumer Affairs Ministry recommending the regulator Sebi to ban sugar futures trade to check prices.

Sugar prices in the retail markets have risen in last few weeks and are ruling at Rs 42 per kg in the national capital.

Sugar is largely traded on leading agri-commodity bourse National Commodity and Derivatives Exchange (NCDEX). The exchange has already raised the margin amount to be deposited by both sellers and buyers on its platform.

To check prices, the government recently imposed an export duty of 20 percent on sugar as part of its efforts to curb outbound shipments and boost domestic supply.

Indias sugar production is estimated to decline to 25 million tonnes in the 2015-16 season (October-September) from 28.3 million tonnes in the previous year. The outlook for the next year is not encouraging as sugar production is pegged lower at 23.26 million tonnes. However, the industry body ISMA feels that there would be sufficient sugar stock to meet the domestic demand of 26 million tonnes as the country would have an opening stock of 7 million tonnes.

With PTI Inputs