Centre slashes sugar dealers’ stock limit to 2,000 quintals from 15 September

New Delhi: The government on Tuesday halved the stock holding limit for sugar dealers to 2,000 quintals from 15 September, tightening curbs on hoarding and speculative trading ahead of the festive season and seeking to ensure adequate domestic supplies at stable prices, the ministry of consumer affairs, food and public distribution said in a statement.

Average retail sugar prices surged 37.5% to ₹63.28 per kg on 31 August from ₹46.02 per kg a year earlier, according to government data. Demand for sugar typically rises ahead of the festive season.

The move also assumes significance as India’s retail inflation accelerated to 4.45% in July, driven by higher food and fuel prices. Sugar and confectionery have a combined weight of 1.36% in the new series of the Consumer Price Index.

The reduced limit will remain in force until 30 November, according to the food ministry. The government had imposed a stock limit of 4,000 quintals on sugar dealers across the country from 1 August, it said.

Under the revised norms, dealers will not be allowed to hold sugar for more than 30 days from the date of receipt and cannot keep more than 2,000 quintals at any location across the country at any time.

The government, however, retained the 4,000-quintal limit for Kolkata and its extended metropolitan areas, citing the region’s role as a sourcing and distribution hub. Kolkata sources sugar from Uttar Pradesh and Maharashtra and supplies the eastern and northeastern regions.

Intensified monitoring

The move comes amid intensified government monitoring of sugar stocks across mills, dealers and traders. During verification drives, instances of excess stockholding, non-disclosure and irregularities in the movement and sale of sugar have been identified, it said.

“As a result of these interventions and improved market availability, ex-mill sugar prices have declined by around 20% in recent days. Retail prices have also started showing a downward trend and are expected to follow the reduction in ex-mill prices,” the ministry said.

The ministry said that it would continue physical verification of sugar stocks in the coming weeks, while dealers and traders are required to regularly declare and update their stocks through the Department of Food and Public Distribution’s online portal.

As of 28 August, sugarcane had been sown on 58.46 lakh hectares, compared with 58.87 lakh hectares a year earlier, a decline of 0.41 lakh hectares, or about 0.7%. The normal area is 54.2 lakh hectares.