Due to the surge in sugar prices earlier this year, and coinciding with the start of the new crushing season and India’s peak festive period, the central government has further tightened inventory limits for dealers.
Amid a surge in sugar prices earlier this year, and coinciding with the start of the new crushing season and India’s peak festive shopping period, the central government has further tightened stock limits for sugar traders. The government stated that the move aims to ensure consumers have access to adequate sugar supplies at reasonable prices during the festive season.
The Department of Food issued a statement on Thursday announcing that, effective October 15, sugar traders are prohibited from holding stocks for more than 15 days, and inventory levels at any single location must not exceed 1,000 quintals. This restriction will remain in effect until November 30.
The press release noted that the government has made exceptions for Kolkata (and its metropolitan area) and the state of Assam, allowing dealers in these regions to hold up to 2,000 quintals, citing local supply requirements and logistical constraints.
According to the department, this measure was introduced even though retail sugar prices have fallen by 15% from their August peak, and ex-factory prices—the price at which sugar mills sell to bulk buyers prior to further distribution—have dropped by approximately 28%.
Ex-factory prices are hovering between ₹4,500 and ₹4,800 per quintal. The retail price stands at ₹56 per kilogram, marking a 20% year-on-year increase.
The government stated that retail prices are expected to decline further as the lower ex-factory prices gradually filter through the supply chain.
The ministry indicated that the tightening of stock limits aims to prevent dealers from hoarding sugar for extended periods, curb speculative trading, and ensure the smooth flow of sugar from mills to consumers.
Kolkata serves as a major procurement and distribution hub for sugar sourced from Uttar Pradesh, Maharashtra, and Karnataka, supplying the eastern and northeastern regions. Consequently, price caps for Kolkata and Assam have been raised to account for longer transportation distances and the logistical constraints involved in supplying sugar to the Northeast.
The new regulations will take effect on October 1, at the start of the 2026–27 crushing season. The government has also advised sugar mills to schedule the commencement of crushing operations based on the agro-climatic conditions of their respective regions.
The central authority stated it would continue to monitor the impact of uneven and insufficient rainfall—driven by the El Niño phenomenon—on certain sugarcane-growing areas, while taking measures to balance domestic supply, consumer prices, and farmers’ returns.
State governments have also been advised to determine the timing of crushing operations based on local conditions.
The government has directed sugar mills, distributors, wholesalers, and other market participants to ensure the continuous flow of stocks and to avoid artificial hoarding. Additionally, wholesalers and retailers have been instructed to pass on the benefits of any decline in ex-factory prices to consumers.