COMMODITY
Govt to allocate fortnightly sale quota to sugar mills from September to prevent artificial scarcity
Aug-31-2026

The government said that retail prices of sugar have started to ease with ex-mill rates declining by around 20 per cent in the last few days and highlighted that it will allocate a fortnightly sale quota to mills from September to ensure smooth supply and prevent artificial scarcity. At present, the food ministry allocates a monthly quota to mills for the sale of sugar. The Food Ministry said it is closely monitoring availability and prices of sugar, while asserting that there is no shortage of sweetener in India.

The ministry said it carried out physical verification of stocks in sugar mills and the exercise revealed that some mills were holding more stocks than declared in monthly returns, while some mills sold less stock than their monthly allocations. To address this problem, the government has decided to introduce a fortnightly sugar allocation system from September, replacing the existing monthly quota system.

Under the fortnightly quota, mills will have to sell at least 40 per cent of the allocation in the first week and the remaining quantity in the succeeding week. Commenting on the benefits of the new measure, the ministry said it will help to monitor the demand and supply situation, respond quickly to changes in market conditions and prevent artificial scarcity. It can release additional stocks if required to maintain adequate market availability. It noted that sugar mills have already been directed to ensure that sugar sold is dispatched from the mill within seven days of sale.

These two measures - fortnightly quota allocation and mandatory dispatch within seven days - would significantly improve the entire supply chain. Bulk consumers of sugar have been asked not to hold stocks in excess of their operational requirements.

Talking about the prevailing high sugar prices, the government said it has taken a series of proactive measures to ensure adequate availability of sugar and prevent artificial tightening of supplies in the domestic market. To control prices, the Centre has recently allowed imports of 10 lakh tonnes of raw sugar by October 31. It has imposed stock holding limits on dealers, as well as bulk consumers like beverage makers. Exports were already banned a few months back. As a result, the ex-mill sugar prices have declined by around 20 per cent in recent days, while retail sugar prices have also started coming down.

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