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More Govt initiatives to prevent artificial sugar shortages
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Monday, 31 August, 2026, 08 : 00 AM [IST]
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Our Bureau, Mumbai
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The Government has stepped up measures to ensure adequate availability of sugar in the domestic market and prevent artificial tightening of supplies, amid a recent sharp rise in prices. Ex-mill sugar prices have declined by around 20 per cent in recent days, while retail prices have also started easing. The Government expects retail prices to follow the downward movement in ex-mill prices as the reduction passes through the supply chain.
The Government has been closely monitoring sugar prices, stocks and movement across the country and has undertaken a series of measures to ensure that adequate supplies reach consumers. The recent decline in prices indicates that the sharp increase witnessed earlier was largely driven by hoarding and speculative activity rather than any actual shortage, with the country maintaining sufficient sugar stocks.
A nationwide physical verification exercise at sugar mills has further reinforced the Government's assessment of comfortable availability. In several instances, mills were found to be holding stocks higher than the quantities declared in their monthly returns submitted to the Government. The exercise has established that there is no shortage of sugar in the country, leaving little justification for panic buying or excessive stocking.
The stock verification exercise also identified instances of short selling, where mills sold less sugar than the quantity allocated to them under the monthly quota. Such practices can unnecessarily restrict market supplies despite the availability of adequate physical stocks, contributing to price pressures.
Another issue identified by the Government was the delayed movement of sugar after sale. In some cases, sugar sold by mills at the beginning of the month was being dispatched or lifted by buyers only towards the end of the month. Such delays can create an artificial scarcity in the market and disrupt the normal flow of supplies.
To address these concerns, the Government has decided to replace the existing monthly sugar quota system with a fortnightly allocation mechanism from September. Under the new system, mills will be required to sell at least 40% of their allocated quantity during the first week and the remaining quantity in the succeeding week. The move is aimed at ensuring a more regular flow of sugar into the market and enabling closer monitoring of supply conditions.
The fortnightly allocation system will give the Government greater flexibility to respond to changes in demand and supply. It will allow market conditions to be monitored more closely and enable additional quota to be released whenever necessary to maintain adequate availability. The mechanism is expected to help align sugar supplies more closely with actual domestic demand and prevent unnecessary tightening of the market.
The Government has also directed sugar mills to ensure that sugar sold is dispatched from the mill within seven days. This requirement, together with the fortnightly quota system, is expected to accelerate the movement of sugar from mills to dealers and ultimately to consumers. It will also discourage unnecessary accumulation and speculative holding of inventory.
Bulk consumers have similarly been advised against accumulating sugar stocks beyond their operational requirements. The Government's measures are intended to ensure that available stocks remain in circulation rather than being held back, thereby supporting greater market stability.
Additional supplies are also expected with the commencement of sugarcane crushing for the new season from October 15. More than 10 lakh tonnes (LMT) of sugar is expected to be produced during October. To ensure that this new-season production reaches the domestic market quickly, the Government has permitted sugar mills to sell sugar produced during October without restriction.
Production is expected to rise substantially in November, with around 45 LMT of sugar likely to be produced. This will provide a significant additional supply cushion for domestic consumption, particularly as demand typically strengthens during the festive period.
The Government has reiterated that there is no shortage of sugar in the country and that all necessary steps are being taken to maintain adequate and continuous supplies at reasonable prices. With ex-mill prices already declining, increased monitoring of stocks, faster dispatch requirements, fortnightly quota allocation and the arrival of new-season production, the Government expects supply conditions to remain comfortable in the coming months, including during the forthcoming festive season.
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