Pressure on Sugar Market Due to Drastic Cut in Dealer Stock Limits

18-Sep-2026 10:36 AM

New Delhi: The Central Government has reduced the sugar stock limit for dealers and stockists by 50 percent—from 4,000 quintals (400 tonnes) to 2,000 quintals (200 tonnes)—a move expected to improve supply and availability in the domestic market and potentially soften prices. This new order came into effect on September 15.

It is noteworthy that the government has already announced a substantial 'free-sale quota' of 13.50 lakh tonnes of sugar for the period of September 16–30, 2026, and has directed mills to continue selling their quotas regularly. Now, the government is tightening regulations on dealers and stockists. Under the new rule, dealers are prohibited from holding more than 200 tonnes of sugar stock at any given time. This order does not apply to Kolkata and its metropolitan area; dealers there may continue to hold stocks of up to 4,000 quintals, as before.

In recent weeks, ex-factory and wholesale sugar prices have dropped significantly from their peak levels; however, the average retail price remains around ₹60 per kilogram, continuing to burden the common public. The Central Government is making efforts to bring this retail price down to a reasonable level as well.

Retail sugar prices are likely to soften further by the end of September, though rates may firm up during the peak festive months of October and November. The industry holds limited sugar stocks, and there is uncertainty regarding whether production will improve in the 2026-27 season.