Govt Tightens Sugar Supply Rules As Prices Ease, Mills To Get Fortnightly Quotas From September

The Indian government has introduced stricter rules on sugar supply quotas, allocating them to mills on a fortnightly basis starting from September. This change aims to maintain steady supplies and prevent artificial scarcity in the domestic market, as sugar prices have recently dropped by approximately 20%. The Food Ministry has emphasized that there is no sugar shortage in the country and is closely monitoring availability and prices.

However, discrepancies were found during a physical verification drive, revealing that some mills were holding more sugar than they declared or selling less than their allocated quota. To combat this, the government has set a rule that mills must sell at least 40% of their fortnightly allocation in the first week and the remaining quantity in the following week.

Additionally, mills are required to dispatch sugar within seven days of its sale. The aim is to enhance visibility over market conditions and ensure deliveries reach the market in a timely manner. Recent measures, including allowing imports of raw sugar and imposing stock limits on dealers and bulk consumers, have contributed to the price reduction.

Industry estimates suggest that India's net sugar production for the 2025-26 marketing year will be around 279 lakh tonnes, with a buffer stock of 35 lakh tonnes expected by the end of September.