Govt Caps Bulk Sugar Consumers’ Inventory at 15 Days
The sugar price surge comes amid E20 fuel row, where it has been alleged that there is growing focus on the diversion of sugarcane towards ethanol production under the Centre’s E20 programme
New Delhi: Amid concerns over the rising prices of sugar, the Centre on Thursday imposed a stockholding limit on bulk consumers of sugar such as confectionery makers, soft drink manufacturers, food-processing firms, sweetmeat sellers and other institutional buyers. It is, however, expected that there would be tight supplies of sugar ahead of the key upcoming festivals like Ganesh Chaturthi, Dussehra, and Diwali this year.
The sugar price surge comes amid E20 fuel row, where it has been alleged that there is growing focus on the diversion of sugarcane towards ethanol production under the Centre’s E20 programme. However, sources said that the government is trying to cut the amount of sugarcane diverted for ethanol in the sugar season beginning October, which could leave more cane available for sugar production and help ease domestic prices in the country.
As per the government, the order will come into force from September 1 and remain in effect till November 30. This follows an earlier order, effective August 1 to November 30, capping stock with sugar dealers at 4,000 quintals for 30 days. The curbs come against the backdrop of a sharp rise in sugar prices, with ex-mill rates hitting record levels on account of a lower opening stock ahead of the 2026-27 season.
Announcing the curb in a social media post, Union food minister Pralhad Joshi said that bulk consumers using more than 10 tonnes of sugar a month will not be allowed to hold stock beyond what they would consume in 15 days. The food ministry has notified the Sugar (stockholding limit of bulk consumers) Order, 2026, which covers confectioners, soft drink manufacturers, food-processing units, sweetmeat sellers and other institutional buyers.
As per the latest industry data, the all-India average ex-mill price rose to Rs 5,400-5,500 a quintal on Tuesday, up from Rs 3,900 a year earlier. “Retail sugar prices have climbed about 13 per cent year-on-year to Rs 52.30 a kg as on August 18, from Rs 46.34 a year ago,” consumer affairs ministry data showed.
Demand for sugar typically rises between August and November, as the country celebrates major festivals such as Ganesh Chaturthi, Dussehra, and Diwali. Under the new order, the monthly quantity of sugar sold by each mill to a bulk consumer -- whether directly or through dealers -- will be verified, and consumption will be determined with reference to GST returns filed by sellers and/or buyers, using the relevant HSN code applicable to sugar.
A bulk consumer has been defined as a confectioner, soft drink manufacturer, food processing unit, sweetmeat seller or any other institutional buyer with an average monthly consumption of not less than 10 tonnes over the last one year, excluding the current month.
The order does not apply to institutions belonging to the central or state governments, Union Territory administrations, or local bodies. The tighter stockholding norm comes amid concerns over sugar availability for the 2026-27 season, which begins on October 1.
Industry estimates put opening stocks for the new season at 40-42 lakh tonnes, while some researchers peg the figure lower, at 32-35 lakh tonnes -- both below the estimated domestic requirement of around 50 lakh tonnes.
Meanwhile, the government on Thursday allowed duty-free imports of 1 million metric tons of raw sugar, as sought to bring down record-high prices that have squeezed consumers, according to a commerce ministry notification.
However, the ministry said that the government allowed for the imports between now and October 31, ahead of India's festival season, when demand for sugar in the world's biggest sugar consumer peaks because of demand for cakes and sweets.
