The lower stock ceiling follows physical verification that found excess holdings, non-disclosure and irregularities in the movement and sale of sugar
The government cuts the stockholding limit for sugar dealers to 2,000 quintals from 4,000 quintals in most parts of the country, tightening restrictions amid concerns over excess holdings and irregularities in the movement and sale of sugar. The revised limit takes effect from 15 September and remains in force until 30 November, according to an order issued by the Ministry of Consumer Affairs on Tuesday.
Dealers will also continue to be barred from holding sugar for more than 30 days from the date of receipt.
The government had imposed the 4,000-quintal limit from 1 August after sugar prices rose sharply. It has now reduced the ceiling following physical verification of stocks at sugar mills, dealers and traders, which identified cases of excess holding, non-disclosure and irregularities in the movement and sale of sugar, the ministry said.
The tighter restriction comes even as wholesale sugar prices have started easing following a series of government measures. Ex-mill prices have declined by around 20 per cent in recent days after interventions aimed at improving market availability and curbing speculative activity, the ministry said.
The 4,000-quintal limit will continue to apply to dealers in Kolkata and its extended metropolitan areas. The ministry said the exception was necessary because Kolkata sources sugar from Uttar Pradesh and Maharashtra and supplies the eastern and northeastern regions.
Government Tightens Stock Controls
The latest measure follows a series of interventions by the Centre in the sugar market over the past month. The government first capped dealer stocks at 4,000 quintals from 1 August. It then extended stock restrictions to large industrial consumers from 1 September, limiting consumers using more than 10 tonne of sugar a month to stocks equivalent to 15 days of their requirement.
The government has also permitted duty-free imports of 1 million tonne of raw sugar until 31 October. It is the first such import intervention in nearly a decade and is aimed at improving domestic availability ahead of the festive season.
The measures have helped ease wholesale prices, although retail prices remain substantially higher than earlier levels.
Supply Concerns Drive Prices
The sharp increase in sugar prices followed concerns over tighter domestic supplies and lower closing stocks for the 2025-26 sugar season, which ends in September. A rainfall deficit during the early part of the monsoon also raised concerns over the outlook for the crop currently under cultivation.
When the government first imposed the 4,000-quintal limit in July, ex-mill sugar prices in Maharashtra had risen to around Rs 42,000 a tonne from Rs 38,000 a tonne in the previous month.
The government said it has undertaken “intensive monitoring and physical verification of sugar stocks across the country… The exercise has identified instances of excess holding, non-disclosure and irregularities in the movement and sale of sugar stocks.” Physical verification “shall continue in the coming weeks”, while the government has introduced a mechanism for “regular declaration and updating of sugar stocks through the Department of Food & Public Distribution’s online portal”.
The latest reduction in the dealer stock limit comes as the government seeks to prevent hoarding and improve the availability of sugar in the domestic market ahead of the festive season.
