The government has asked sugar mills to maintain adequate supplies and keep prices reasonable during the upcoming festival season, as it looks to prevent another sharp rise in the cost of the sweetener.
It has also warned that it will take corrective measures if prices rise without justification, a food ministry official said on Thursday, Reuters reported.
Sugar prices in India hit a record high last month amid concerns over supplies. This prompted the government to allow duty-free imports of 1 million metric tonnes of sugar.
Ashwini Srivastava, joint secretary in the food ministry, said the recent price rise was not due to a sudden increase in demand.
Instead, sugar was being hoarded in anticipation of higher prices during the festival season, he said.
The government has asked the sugar industry to ensure that enough sugar is available in the market and that prices remain stable during the festive period.
Sugar prices have fallen from last month’s record high in recent days, but they are still nearly 20% higher than they were two months ago.
Sugar consumption usually increases between August and November as India celebrates festivals such as Ganesh Chaturthi, Dussehra and Diwali.
During this period, demand for sugar rises as households buy traditional sweets and confectionery. The government is therefore keeping a close watch on production, stocks and prices to avoid supply shortages.
India is usually a major sugar exporter, but it is now importing sugar from Brazil for the first time in nearly a decade.
The government has allowed duty-free imports of up to 1 million metric tonnes to improve domestic availability and ease price pressures.
So far, applications have been received for imports of around 800,000 metric tonnes under the duty-free quota, Srivastava said.
The government also plans to track sugar production and sales more closely.
Sugar mills have been asked to provide accurate monthly data on production and sales. The information will help the government assess supply conditions and take timely steps to control prices.