Amid a surge in sugar prices, the Centre on Tuesday imposed stockholding limits on sugar dealers, under which they cannot hold more than 4,000 quintals of sugar or retain stocks for more than 30 days from the date of receipt, seeking to curb hoarding and ease prices ahead of the festive season. The government order is effective from August 1 to November 30.
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The NFCSF official, however, said the stockholding limits should be sufficient to cool the market by forcing traders to release inventories and maintained that sugar imports would not be required this year.
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Retail sugar prices rose to an all-time high of ₹49 per kg on average as of July 28, up from ₹46.5 per kg a month ago and ₹46 per kg a year earlier.
The restrictions come as wholesale sugar prices have surged over the past month amid concerns over tighter domestic supplies and lower closing stocks at the end of the 2025-26 sugar season, which begins in October and ends in September.
In addition, a rainfall deficit in the current monsoon season added a premium to sugar prices. During June 1-July 28, the cumulative rainfall over the country was 16% below normal, IMD data revealed.
The ex-mill price (cost of sugar right as it leaves the factory production line) of sugar in Maharashtra has risen to around ₹42,000 per tonne this month from ₹38,000 per tonne last month.
A senior official at the National Federation of Cooperative Sugar Factories Ltd (NFCSF) said ex-mill prices had already begun easing following government intervention. “Ex-mill prices were around ₹44.50 per kg last week and have now fallen to ₹43.50 per kg. Over the past 10-15 days, speculation that closing sugar stocks could fall to 3.1-3.2 million tonnes—the lowest in a decade—had fuelled the rally. I expect prices to soften by another ₹0.50 per kg as traders holding sugar will now have to liquidate stocks,” the official said.
The Indian Sugar & Bio-energy Manufacturers Association (ISMA) estimates the 2025-26 sugar season to close with comfortable stocks of approximately 4 to 4.2 million tonnes.
The latest move comes barely two-and-a-half months after the Centre prohibited sugar exports until September 30, 2026, to ensure adequate domestic availability amid concerns over tightening supplies. On July 25, it also announced that it will inspect sugar mills physically during the first 14 days of August to verify the stocks held.
Trade remains divided over whether the government will eventually allow sugar imports. According to Deepak Pareek, founder of agri-advisory firm HnyB, “The government does not believe trade estimates. Sugar prices are at their highest since 2022, when imports were allowed.”
He also believes the government may already be late in deciding on imports. “Import parity existed around two months ago when the landed cost (price including shipping and customs) was about ₹38 per kg, but it has now increased to around ₹45 per kg. The government will not want prices to rise further and may begin allowing imports as early as August if prices continue to trend upwards,” he said.
India last imported sugar in 2016-17 and 2017-18 after an El Nino-induced drought in 2015 cut cane planting.
