India has increased the minimum selling price of sugar by 6.9% to help mills pay farmers on time.
The factory-gate selling price for millers was raised to 31 rupees (44 cents) per kilogram from 29 rupees at present, according to a government notification. The benchmark price is effective immediately, Food Ministry said.
A rise in the state-controlled price may prompt millers to sell more locally and reduce exports, supporting the global market.
Sugar stockpiles in India, where production is set to exceed local demand for a second year, almost doubled to 15.4 million metric tons as of Dec. 31 from a year earlier following bumper output, according to Indian Sugar Mills Association data.
The move is also expected to help millers, who are under pressure to clear dues to cane growers. Mills owed 201.7 billion rupees to farmers as of Feb. 13, the ministry said.