Sugar stock limit for dealers halved to 2,000 quintals from Sept 15

The Union government has reduced the maximum sugar stock that dealers can hold from 4,000 quintals to 2,000 quintals, effective September 15. The revised limit will remain in force until November 30, according to the Ministry of Consumer Affairs, Food and Public Distribution.

The move is aimed at preventing hoarding and speculative trading, ensuring adequate sugar availability in the domestic market. Dealers will also be barred from holding sugar for more than 30 days from the date of receipt.

An exception has been made for Kolkata and its extended metropolitan region, where the stock limit stays at 4,000 quintals. The region serves as a key distribution hub for sugar from Uttar Pradesh and Maharashtra, supplying eastern and northeastern India.

The decision follows physical verification of stocks at mills, dealers, and traders, which revealed instances of excess holding, non-disclosure, and irregularities in movement and sale.

Sugar prices had risen sharply in recent weeks, with retail rates climbing from Rs 48.18 per kg on July 20 to Rs 55.70 per kg on August 20 — a jump of about 15.6 per cent in a month. The government attributed the rise to lower-than-expected production, higher festive demand, weather-related crop damage, tightening global supplies, and speculation.

Production this season is estimated at around 306 lakh metric tonnes, down from an initial estimate of 343 LMT, due to diseases like Red Rot and Top Borer, as well as waterlogging from excess rainfall.

Earlier measures include a stock limit of 4,000 quintals on dealers from August 1, a cap on bulk consumers at 15 days of consumption from September 1, and duty-free imports of 10 LMT of raw sugar. Mills have been advised to begin crushing from October 15 to boost festive-season supplies.

The ministry said these steps have started showing results, with ex-mill prices declining by around 20 per cent in recent days and retail prices also beginning to ease.