To curb hoarding and speculative trade, the government on Tuesday imposed stock holding limits on sugar dealers across the country for the period between August 1 and November 30.
The order prohibits dealers to hold stocks more than 30 days from the date of receipt of more than 4,000 quintal of sugar at any given point.
The recent increase in ex-mill prices of sugar – the price at which sugar mills sell to wholesalers and traders – is not supported by the prevailing demand-supply fundamentals, according to an official statement.
“It has also come to notice that hoarding by certain traders, dealers and market intermediaries, along with speculative transactions and paper trade without the actual physical movement of sugar from mills, has contributed to creating an artificial perception of scarcity in the market,” it stated.
The restrictions have been imposed under the Essential Commodities Act, 1955 and the Sugar (control) order, 2025. All sugar dealers will have to declare their sugar stocks and update inventory every week through the Department of Food and Public Distribution’s portal.
The department will closely monitor the market and take further measures, if required, to ensure sugar remains available at reasonable prices. “Adequate quantities of sugar are available in the country to meet domestic consumption requirements,” the note stated.
Average retail price of sugar according to the price monitoring cell of the department of consumer affairs rose to Rs 48.96/kg on Tuesday, an increase of 6.55% on year.
“The requirement of dealers to declare stock positions on the portal is a welcome step towards greater accountability and real time visibility into market supplies,” Deepak Ballani, director general, Indian Sugar & Bio-energy Manufacturers Association (ISMA) said. Ballani said this step is prudent and seasonal measure aligned with the government’s broader objective of maintaining price stability and adequate availability of sugar for consumers.
ISMA and the National Federation of Cooperative Sugar Factories (NFCSF) recently stated that sugar availability is comfortable and stocks are enough to meet domestic demand.
In April, ISMA revised its estimate of India’s gross sugar production for the 2025-26 season (October – September) to 32 million tonne (MT), down from its earlier projection of 32.4 MT. After diversion for ethanol, net sugar production by ISMA is projected at 29.3 MT, compared to 26.12 MT in 2024-25 season
In May, the government has banned sugar export till end of September, aimed at keeping domestic prices stable amidst expectation of lower sugar closing inventory.