Govt imposes 15-day sugar stock limit on bulk consumers as prices hit record high

The government has tightened sugar stockholding limits for bulk consumers amid record-high prices ahead of the festive season, directing businesses that consume more than 10 metric tonnes of sugar a month to hold inventories for no more than 15 days.

The order, issued by the Department of Food and Public Distribution on August 19, will come into force from September 1 and remain effective until November 30.

Under the order, no bulk consumer using more than 10 metric tonnes of sugar per month as a raw material for production, consumption or use can keep stocks for more than 15 days.

The restriction will apply to confectioners, soft drink manufacturers, food processing industries, sweetmeat sellers and other institutional buyers consuming at least 10 metric tonnes of sugar a month on average during the last one year, excluding the current month.

Government institutions at the central and state levels, Union Territory administrations and local bodies have been exempted from the order.

The move comes ahead of the festive season, when demand for sugar typically rises, and at a time when domestic sugar prices have touched record highs.

The all-India average ex-mill sugar price touched an all-time high of ₹5,400-5,500 a quintal on Tuesday.

The ex-mill price stood at ₹3,900 a quintal a year ago.

In line with rise in ex-mill rates, the average all-India retail price of sugar rose 13% to ₹52.3 a kg on August 18 this year, from ₹46.34 a kg a year earlier, according to data from the consumer affairs ministry.

The government has also laid down a mechanism to verify sugar consumption by bulk buyers.

"The monthly quantity of sugar sold by each sugar mill to the bulk consumer whether directly or through dealers, shall be verified and consumption of sugar shall be determined, with reference to the Goods and Services Tax returns filed by the sellers and/or buyers using the relevant Harmonised System of Nomenclature (HSN) Code applicable to sugar," the order stated.