Can’t hold more than 10 tonnes for 15 days: Govt imposes stock limit on sugar for bulk consumers

Government Imposes Strict Sugar Stock Limits on Bulk Consumers Amidst Soaring Prices

NEW DELHI – In a significant move to curb rising sugar prices and ensure adequate domestic availability, the Indian government has imposed a stringent stock limit on bulk consumers of sugar. Effective from September 1st to November 30th, confectionery makers, soft drink manufacturers, food processing industries, sweetmeat sellers, and other institutional buyers are now restricted to holding a maximum of 10 tonnes of sugar for a period not exceeding 15 days.

This measure comes as wholesale sugar prices in key agricultural states, particularly Maharashtra, witnessed an alarming surge of nearly 20% in August, reaching a record high of Rs 5,350 per 100 kg. The all-India average ex-mill sugar price has similarly climbed to an unprecedented Rs 5,400-5,500 a quintal this week, a substantial increase from Rs 3,900 a quintal just a year ago, representing a 38-41% hike.

The ripple effect of these wholesale price increases has already reached retail markets. According to data from the consumer affairs ministry, the average all-India retail price of sugar rose by 13% to Rs 52.30 per kg on August 18th, up from Rs 46.34 a kg the previous year.

A key factor contributing to the current supply concerns is the government’s aggressive push towards the E20 programme, which aims for 20% ethanol blending in petrol. This initiative has led to an increased diversion of sugarcane towards ethanol production. In response to the present sugar supply crunch, the government is now actively considering reducing the amount of sugarcane earmarked for ethanol in the upcoming sugar season, beginning October. This strategic shift is anticipated to make more cane available for sugar production, thereby helping to stabilize domestic prices.

The industry is particularly concerned about the impending 2026-27 sugar season, which is expected to commence with significantly lower opening stocks. While industry estimates place the carry-forward stock at a modest 40-42 lakh tonnes, some researchers paint a bleaker picture, estimating it to be as low as 32-35 lakh tonnes. This is in stark contrast to the estimated domestic requirement of approximately 50 lakh tonnes.

To put this into perspective, the current season began with a more comfortable opening stock of 47 lakh tonnes on October 1st, 2025. Based on an estimated production of 280 lakh tonnes and exports of 7 lakh tonnes, the total sugar availability for 2025-26 was projected at around 320 lakh tonnes. With domestic consumption estimated at 285 lakh tonnes, this would leave a closing stock of roughly 35 lakh tonnes, reinforcing anxieties about insufficient availability at the start of the next season.

This latest government intervention underscores the urgency of addressing the escalating sugar prices and ensuring a stable supply for both consumers and industries. The effectiveness of these measures and the government’s ability to rebalance sugarcane allocation between sugar production and ethanol blending will be closely watched in the coming months.