Economics SL IA on Microeconomics. Got 7 from Econ teacher, and the article was chosen from The Times of India.
Sugar consumption to drop as PDS subsidy goes
CHENNAI: With the union government withdrawing the subsidy given to state governments for supplying sugar
through PDS (public distribution system) from April 1 and off-take being impacted by the protests against soft drink
brands, sugar consumption would drop by 3.5% in the 2016-17 season (October-September).
Sugar consumption would decline to around 24 million tonnes in the current season, estimates showed. “This is likely
to be driven by a lower off-take of sugar from the PDS, short-term consumption loss post demonetisation as well as
impacted demand from bulk consumers such as soft drink manufacturers, bakeries, confectioners, hotels and
restaurants, which account for around 60%-70% of milled sugar demand,” ratings agency ICRA said.
The union government has withdrawn the Rs 4,500-crore subsidy for state governments who distribute subsidised
sugar through the PDS applicable from 2017-18. “Sugar sales and off-take from sugar mills is substantially lower as
compared to last year,” Indian Sugar Mills’ Association (ISMA) said. “We have already received reports from all
sugar mills, and noted that up to end of January, sales by sugar mills has been lower by 7.5 lakh tonnes,” it said.
The anticipated lower demand by state governments and drop in sugar purchase by the bulk consumers would impact
consumption, ISMA stated. ISMA expects that the sugar sales in the current season to be between 23.8 million and 24
“Apart from these short-term developments which have impacted the off-take in the current year, increasing health
consciousness among consumers is likely to impact the off-take of certain food products such as white sugar and oils
in the long run,” ICRA said…
- Total number of pages: 6 pages
- Topic: Sugar consumption to drop as PDS subsidy goes
- Subject: Economics
- The file is in PDF format.