India cabinet approves creation of buffer stock of 40 lakh tonnes of sugar

The Cabinet Committee on Economic Affairs (CCEA) has approved a proposal to build a buffer stock of 40 lakh tonnes of sugar for one year from August 1, 2019, to July 31, 2020, at an estimated cost of Rs 1,674 crore. “Creation of buffer stock of 40 lakh tonnes of sugar is for one year and would incur the estimated maximum expenditure of Rs 1,674 crore,” official sources said.

However, based on the market price and availability of sugar this may be renewed by the food and public distribution department anytime for withdrawal or modification.

“The reimbursement under the scheme would be met on a quarterly basis to sugar mills which would be directly credited into the farmers’ account on behalf of mills against sugarcane price dues and subsequent balance if any would be credited to the mills’ accounts,” the sources added.

“The decision will lead to an improvement in the quality of sugar mills and a reduction in sugar inventories. It will also lead to stabilization in sugar prices by alleviating instability in the price sentiments in domestic sugar markets and thereby facilitate the timely clearance of cane price dues of farmers,” the sources pointed out. The decision will also benefit sugar mills in all sugarcane producing states by way of clearing their cane price arrears.

Shekhar Ghosh is consulting editor, He has edited and written for publications like Business India, Business Standard, Business Today, Outlook and many other international publications. He can be reached at

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