Government to implement fortnightly sugar sale quotas from September to curb market scarcity

The Indian government has announced a shift to a fortnightly sugar allocation system for mills starting in September. This regulatory change is designed to ensure smooth market supply, prevent artificial scarcity, and maintain price stability. Previously, the Ministry of Food allocated sugar quotas on a monthly basis, but a nationwide physical verification of stock levels revealed that some mills were failing to report accurate inventories or were deliberately selling less than their allocated quotas.

Under the new system, sugar mills are required to sell at least 40 percent of their fortnightly allocation within the first week, with the remainder sold in the following week. Furthermore, the government has mandated that any sugar sold must be dispatched from the mill within seven days of the transaction. These two measures aim to streamline the supply chain and curb speculative hoarding practices that have recently caused fluctuations in domestic sugar prices.

The Food Ministry's investigation uncovered that some mills were hoarding stock, reporting lower inventory figures than they actually held, or under-selling to create supply constraints. Officials emphasized that there is no actual shortage of sugar in India, describing the recent price surge as being driven by speculation and hoarding rather than a lack of production. Bulk consumers have been officially requested to avoid holding stocks that exceed their immediate operational requirements.

Market impacts are already becoming visible, with ex-mill sugar prices falling by approximately 20 percent in recent days. These results follow a series of proactive government interventions, including a ban on sugar exports, the imposition of stock-holding limits on dealers and bulk consumers, and the authorization of 10 lakh tonnes of duty-free raw sugar imports by October 31. Retail prices are expected to follow the downward trend of ex-mill rates in the coming period.

The government maintains that this new fortnightly quota system will provide better oversight, allowing for quicker responses to market changes. By monitoring supply more closely, authorities will have the flexibility to release additional stocks if required to maintain market availability. The ministry reiterated that with sufficient physical stocks available across the country, there is no justification for panic buying or excessive stocking by market participants.