The downfall in sugar prices is continuing with the rates bound to slide at least Rs 50 a quintal by the month-end.

The prices of sugar rose by Rs 30-40 a quintal across all categories during the past few days following the government's notification to debar mills selling more than the allocated quota from buffer stock subsidy, exports subsidy and loan disbursement.

The sugar industry currently gets an export subsidy of Rs 135 a quintal. Besides, sugar mills need to raise bills on a quarterly basis to avail of buffer stock subsidy, which reimburses their interest cost, carrying cost, insurance cost and third-party warehouse rent.

The mill delivery prices of S30 and M30 are quoted between Rs 1,230 and Rs 1,240 a quintal and Rs 1,250-1,270 a quintal, respectively, while for naka delivery, these varieties sell in the range of Rs 1,310-1,320 a quintal and Rs 1,340-1,360 a quintal, respectively. An exceptionally better quality of sugar for mill delivery is quoted at Rs 1,300 a quintal and the same is sold at Rs 1,375 a quintal for naka delivery.

According to industry sources, the government, in a notification issued last Friday, threatened sugar mills against the practice of selling beyond their quotas with the permission from the court under respective jurisdictions.

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