Govt Tightens Sugar Stock Rules To Curb Hoarding Ahead Of Festivals

(MENAFN- Live Mint) New Delhi: The government has tightened sugar stockholding norms for dealers ahead of the festive season, halving the permissible stock to 1,000 quintals and the holding period to 15 days, in a bid to curb hoarding and ensure adequate supplies to consumers during the peak festive season beginning 11 October.

The revised norms will take effect from 15 October and remain in force until 30 November, the ministry of consumer affairs, food and public distribution said in a statement on Thursday. Dealers will not be allowed to hold sugar for more than 15 days from the date of receipt or keep stocks exceeding 1,000 quintals at any location at any given time, it said.

The move is aimed at keeping sugar prices in check at a time when demand typically rises during the festive season. Retail sugar prices stood at ₹55.62 per kg on 1 October, about 20% higher than a year earlier. However, prices have corrected sharply from their August peak, falling 11.7% from ₹62.96 per kg a month earlier.

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However, a higher stockholding limit of 2,000 quintals has been allowed in Kolkata and its extended metropolitan areas and Assam, taking into account the logistical requirements of supplying sugar to eastern and northeastern India and the seasonal surge in demand during Durga Puja.

“Kolkata sources sugar from Uttar Pradesh, Maharashtra and Karnataka and supplies it to the eastern part of the country, including the North-Eastern region,” the ministry said, explaining the higher limit for the region. The additional allowance for Assam takes into account geographical constraints and transportation logistics.

Sugar seasons beginning

The move comes at the beginning of the new sugar season on 1 October, with the government seeking to prevent the accumulation of stocks in the distribution chain and discourage speculative trading during a period of potentially higher consumer demand.

“The latest intervention comes as the government seeks to balance two competing objectives in sugar policy - ensuring remunerative returns for sugarcane farmers while keeping retail sugar prices affordable for consumers,” said Binod Anand, a member of the high-power committee on minimum support price (MSP ) and agricultural reforms.

The tighter stockholding norms come as sugar prices have eased sharply from their August peak. According to the government, average retail sugar prices have declined 15% from the August peak, while ex-mill prices have fallen by around 28%.

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Ex-mill prices have remained stable over the past three weeks, with the government expecting lower prices at the mill gate to gradually pass through the distribution chain and lower retail prices further.

The government has asked sugar mills, dealers, wholesalers and other market participants to ensure continuous movement of stocks and avoid artificial accumulation. Wholesalers and retailers have also been urged to pass on the decline in ex-mill prices to consumers.

Augmenting availability

On 21 August, the government allowed duty-free import of 1 million tonnes of raw sugar to augment domestic availability and curb prices.

India's domestic sugar consumption is estimated at 28 million-28.5 million tonnes annually and production was about 28 million tonnes in the 2025-26 sugar cane crushing season. Consumption by businesses such as food and beverage companies, hotels, restaurants, the catering sector and processed food companies account for 60-65% of total demand, with the remainder being consumed by households.

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The measures assume significance as the new sugar season gets underway and festive demand typically strengthens consumption. By capping both the quantity and duration for which dealers can hold stocks, the government is seeking to reduce the scope for stock accumulation at the intermediary level.

The government has also asked sugar mills to begin crushing operations based on agro-climatic conditions in their respective regions, it said.

It will continue to monitor the impact of uneven and deficient rainfall associated with El Niñ conditions on sugarcane in some producing regions and take measures to maintain domestic availability, the government said.

State governments have also been advised to take appropriate decisions on the commencement of crushing operations based on field conditions, it said.

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