The Indian government announced on Saturday the release to the market of 3.65 million tonnes of sugar during the January-March quarter to ensure adequate supply and keep prices in check.
The government controls distribution of sugar within the country, allocating fixed quantities that can be sold by producers every month. Mills have to give 10 percent of their production to the government as levy sugar at a lower price which is then sold to the poor at cheaper rates.
"Out of this quota, 1.2 million tonnes of indigenous free sale sugar will be released for the month of January, 2006," the statement said.
"With levy quota release of 216,000 tonnes for January, the total availability of sugar for domestic consumption for the current month would be 1.41 million tonnes." India, the world's biggest sugar consumer, had a dismal sugar harvest in 2004/05 (October-September) but is expecting a good sugar crop in 2005/06 due to good monsoon rains in the western state of Maharashtra and coastal areas of Tamil Nadu.