The Government of India has reduced the sugar stockholding limit for dealers to 2,000 quintals from 4,000 quintals. This will come into effect from September 15 and continue till November 30. The government said the new stock limit aims to curb sugar hoarding and speculative trading across the country. The sugar shares are under pressure, with many stocks like Dwarikesh Sugar and Triveni Engineering down as much as 6% in intra-day trade.
It added that the move will protect consumer interest by ensuring adequate sugar availability and price stability. At present the sugar holding limit stands at 4,000 quintals.
Amended provision for sugar deals
As a part of the amended provisions, sugar deals shall:
- Not hold sugar stocks for more than 30 days from the date of receipt
- Not hold more than 2,000 quintals of sugar stocks in the country
Sugar stock limit: Exemptions
However, this amendment is not applicable to sugar dealers in Kolkata, where the sugar holding limit remains at 4,000 quintals due to market-specific requirements of the region.
The provision is not applicable to the city of Kolkata, as it sources sugar from Uttar Pradesh and Maharashtra and supplies it to the eastern regions of the country.
“The measure is aimed at further curbing hoarding, discouraging speculative trading and preventing excessive accumulation of sugar stocks. It will facilitate the orderly movement of sugar through the supply chain and ensure its continuous availability to consumers at reasonable prices,” the government said in its press release.
Shares of sugar companies see sharp selling
Following the announcement, sugar stocks posted declines as Dalmia Bharat Sugar fell 4%, Uttam Sugar Milll was down 5%, Dhampur Sugar Mills was down more than 3%, Bajaj Hindusthan Sugar was down over 2%, and Shree Renuka Sugar was down around 3%.