Mumbai: India, the world’s second-biggest sugar producer, may more than double the size of its stockpiles to halt a slide in domestic prices amid record output, agriculture minister Sharad Pawar said.
The government may pay sugar producers the cost of maintaining stockpiles of 5 million tonnes (mt), up from the existing 2mt, after prices of the sweetener fell by almost a quarter in the domestic market in the past six months.
White sugar, traded in London on Euronext.liffe, has fallen 26% in the past year as global production is heading for a surplus for the first time in four years.
That’s prompted the government to pay exporters as much as $33 a tonne for transportation costs and build-up reserves.
“We are in the process of considering the demand to increase the buffer,” Pawar said when asked by reporters if the government would raise the sugar reserves to 5mt as requested by the country’s sugar producers.