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The Union government has tightened sugar stockholding limits as prices hit record highs ahead of the festive season, ordering bulk consumers using more than 10 metric tonnes of sugar a month to hold inventories for no more than 15 days.
According to a notification issued by the Ministry of Consumer Affairs, Food and Public Distribution on Wednesday, the new restriction will take effect from September 1 and remain in force until November 30.
Last month, the government had ordered dealers to hold sugar stocks for no more than 30 days to boost supplies.
Stock limit cut to 15 days
The government has also specified the entities covered by the definition of bulk consumers. These include confectioners, soft drink manufacturers, food processing industries, sweetmeat sellers and other institutional buyers consuming at least 10 metric tonnes of sugar a month on average during the last one year, excluding the current month.
The order, however, exempts institutions belonging to the central or state governments, Union Territory administrations and local bodies.
Why are sugar prices rising?
Sugar demand is expected to rise from August to November as the country enters the major festive season, including Ganesh Chaturthi, Dussehra and Diwali. Bulk consumers such as biscuit and confectionery manufacturers typically build inventories ahead of the festival season.
Despite the government’s order last month limiting dealers to holding sugar stocks for no more than 30 days, Indian sugar prices have risen 10 per cent over the past month to a record high and are expected to remain elevated for at least the next three months as supplies tighten and festive demand gathers pace.
Alongside the increase in demand, patchy rains and dry weather conditions have affected the sugarcane crop, which typically requires copious amounts of water for irrigation.
The average retail price of sugar rose 13 per cent year-on-year to ₹52.30 per kg on August 18, from ₹46.34 per kg, according to Consumer Affairs Ministry data.
According to ChiniMandi, sugar prices in India have climbed to record levels. Uttar Pradesh’s M-grade sugar reached an ex-factory price of ₹5,400 per quintal on August 18, while ex-factory prices in Maharashtra rose to around ₹5,300 per quintal. Including GST, the price is reaching ₹5,550-5,600 per quintal.
Spot prices have also surged, with sugar quoted at around ₹5,775 per quintal in Delhi and ₹5,754 per quintal in Muzaffarnagar. The increase in ex-factory prices is also feeding into wholesale markets, with Delhi’s wholesale sugar price reaching around ₹5,800 per quintal.
Higher wholesale prices are expected to feed through to the retail market, where sugar prices have already reached ₹58-60 per kg in some markets.
Concerns over 2026-27 sugar supplies
The tighter stock limit comes amid concerns over supplies for the 2026-27 sugar season, which begins on October 1.
Industry estimates put opening stocks for the new season at 4-4.2 million tonnes, while some researchers expect them to be lower at 3.2-3.5 million tonnes. Both estimates are below the estimated domestic requirement of around 5 million tonnes. For the ongoing 2025-26 season, total sugar availability is estimated at about 32 million tonnes against domestic consumption of 28.5 million tonnes. After exports of around 700,000 tonnes, closing stocks could decline to roughly 3.5 million tonnes, reported Moneycontrol.
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