Centre imposes stockholding limit of sugar to rein in price surge

In a bid to curb the recent surge in sugar prices, the Centre has implemented a two-pronged strategy. On Thursday, the government imposed a limit on sugar stockholding for bulk consumers, including confectioners, soft drink manufacturers, food processing industry, sweetmeat sellers, and institutional buyers who consume a minimum of ten metric tonnes of sugar on average per month over the past year. This restriction caps the storage period of sugar to a maximum of 15 days for any purpose.

Moreover, the government has permitted the duty-free import of 10 lakh metric tonnes of raw sugar until the end of October. This move is particularly significant considering the festive season is approaching. The decision to allow duty-free imports is part of a separate order issued by the Ministry of Commerce and Industry, amending the import policy for raw sugar under the Tariff Rate Quota until October 31, 2026.

The sugar stockholding limit applies to those consuming more than ten metric tonnes of sugar monthly as raw material for production, consumption, or use. Government institutions are exempted from this regulation. To enforce compliance, the government will verify the monthly quantity of sugar sold by each sugar mill to bulk consumers, whether directly or through dealers.

Consumption will be determined based on Goods and Services Tax returns filed by sellers and/or buyers using the relevant Harmonised System of Nomenclature (HSN) Code applicable to sugar.

The decision to impose these measures was prompted by a significant spike in sugar prices, which have risen by approximately 15 percent in a single month. According to data from the Department of Consumer Affairs, retail sugar prices reached Rs 5,152.44 per quintal on August 20, a 15.12 percent increase compared to Rs 4,475.84 per quintal the previous month, and 19.68 percent higher than the price a year ago, which stood at Rs 4,305.05 per quintal.