Government relaxes sugar stockholding limit for bulk consumers but only for imported sugar
The government has doubled the stockholding limit for bulk sugar consumers to 30 days but restricted the additional amount to imports under the Advance Authorisation Scheme (AAS) and Tariff Rate Quota (TRQ).
The move is aimed at ensuring adequate supplies are available for food and other industries ahead of the festive season without putting additional pressure on domestic stocks, the government said in a statement on Friday.
The government permitted duty-free import of 1 million tonnes of raw sugar to augment domestic availability and curtail rising prices on 21 August.
The stock that bulk consumers purchase from the open market will continue to be capped at 15 days of consumption, the Department of Food and Public Distribution said in the statement. Bulk consumers must declare their sugar stocks every Friday through the department’s online portal.
The move follows consultations with major bulk consumers, who had sought a higher stockholding limit ahead of the festive season and permission to directly procure imported sugar from importers holding supplies under AAS and TRQ.
India’s domestic sugar consumption is estimated at 28 million-28.5 million tonnes annually and production was about 28 million tonnes in the 2025-26 sugar cane crushing season. Consumption by institutions such as food and beverage companies, hotels, restaurants, the catering sector and processed food companies account for 60-65% of total demand, with the remaining demand from retail households.
Consumers using more than 10 tonnes of sugar a month as raw material for production, consumption or other industrial use are allowed to hold stocks equivalent to not more than 15 days of consumption.
The government said the additional flexibility is intended to ensure uninterrupted supplies to genuine industrial consumers while preventing higher stockholding from exerting pressure on domestic sugar availability. Under the revised arrangement, stocks held beyond the existing 15-day limit will have to be sourced exclusively from eligible imported sugar.
Easing prices
Sugar prices have started easing from their recent highs. Retail sugar prices have fallen by about 10% from ₹65 per kg in August to ₹58.50 per kg, while ex-mill prices have declined by almost 25%, according to the government. The relatively slower fall in retail prices indicates that the decline in prices at sugar mills has not been fully passed on to consumers, the government said.
At a meeting with representatives of the Indian Sugar & Bio-energy Manufacturers Association, the National Federation of Cooperative Sugar Factories and sugar traders, the secretary of the Department of Food and Public Distribution urged wholesalers, retailers and other participants in the supply chain to pass on the reduction in ex-mill prices to consumers.
The government said it would continue to monitor sugar availability and prices and take measures, if required, to ensure adequate supplies for consumers and the food processing and other industries.
The new sugar season starts 1 October, when sugarcane farmers will receive a higher fair and remunerative price of ₹365 per quintal. The government has said its sugar policy seeks to balance the interests of sugarcane farmers and the need to maintain stable and reasonable prices for consumers.
Demand by bulk consumers typically rises around the festive season, when food-processing companies and other industrial users increase procurement of sugar. By allowing additional stocks only from eligible imports, the government is seeking to provide greater inventory flexibility without allowing the relaxation to translate into increased demand for domestically available sugar.
