Govt cuts sugar stock holding limit on dealers to 2,000 qtls as retail prices stay elevated

NEW DELHI: The Centre on Tuesday further tightened the stock holding limit for sugar dealers, cutting it from 4,000 quintals to 2,000 quintals, effective from September 15 to November 30, as it looked to rein in high retail prices of the sweetener.

The stock holding limit of 4,000 quintals, first imposed on August 1, will, however, remain unchanged for Kolkata and its extended metropolitan areas, "considering the specific market requirements of the region", the food ministry said in a statement.

The move is aimed at ensuring adequate availability of sugar in the domestic market and checking hoarding and speculative trading, the ministry added.

Under the amended norms, a dealer cannot hold any stock for more than 30 days from the date of receipt, and cannot hold sugar, at any time, anywhere in the country, in excess of 2,000 quintals.

Explaining the exemption for Kolkata, the ministry said the region sources sugar from Uttar Pradesh and Maharashtra and supplies it onward to the eastern and north-eastern parts of the country, which is why the earlier limit of 4,000 quintals has been retained there.

The decision comes even as retail sugar prices remain elevated. The all-India average retail price stood at Rs 63.28 per kg on August 31, up 37 per cent from Rs 46.02 a year earlier, according to Consumer Affairs Ministry data.

Wholesale prices also rose 36.28 per cent year-on-year to Rs 58.40 per kg.

Industry data, however, shows some cooling at the mill level; the ex-mill price of sugar in Maharashtra fell 30 per cent to Rs 45-46 per kg on September 1, from a peak of Rs 67 per kg on August 18.

The Centre has blamed mills for "jacking up" prices, maintaining that the country has adequate sugar stocks. This is despite production estimates for the 2025-26 marketing year (October-September) being revised down to 306 lakh tonne from an earlier projection of 343 lakh tonne.

Annual domestic demand is estimated at around 280-285 lakh tonnes.