Balrampur Chini, Dhampur Sugar: Sugar stocks in focus on reports that govt might cut sugar import duty

Reportedly, Indian government officials are considering proposals to lower or scrap the 100% tax on inbound sugar shipments as domestic prices hit a record high. The move also aims to contain supply pressures, Bloomberg said, citing people familiar with the matter.

According to the report, officials are weighing several proposals to lower the tax on sugar imports ahead of the festival season, when domestic consumption typically rises. However, a decision regarding the proposals hasn’t been made yet.

Domestic and global sugar prices surge

Ex-mill sugar prices in Maharashtra recently hit about ₹46 (48 cents) a kilogram, an all-time high, the Bloomberg report said, citing data from the Indian Sugar and Bio-energy Manufacturers Association (ISMA).

Prices of sugar have surged amid concerns that El Niño will disrupt harvests. Furthermore, a short supply has also contributed to the surge in price, with India producing about 27.9 million tonnes of sugar this season, compared to a demand of approximately 28.5 million tonnes. The festive season demand for sugar picks up from August to November, which also adds to the price and supply pressures.

Other measures undertaken by the government to contain sugar prices

The government had previously stepped up its measures to ensure adequate sugar availability, imposing stock-holding limits on sugar dealers across the country from August 1, 2026 to November 31, 2026, as per a Press Information Bureau (PIB) report dated July 28.

“In order to curb hoarding, discourage speculative trading and ensure the continuous availability of sugar at reasonable prices, the Government has decided to impose stock holding limits on sugar dealers,” the Ministry of Consumer Affairs, Food & Public Distribution said in the release.

The measure, it stated, has been aimed at maintaining orderly supplies in the domestic market, safeguarding consumer interests, and ensuring that genuine trade and distribution activities continue without disruption

As per the release, the Government has observed that the recent increase in ex-mill prices of sugar was not supported by the prevailing demand-supply fundamentals.

“It has also come to notice that hoarding by certain traders, dealers and market intermediaries, along with speculative transactions and paper trade without the actual physical movement of sugar from mills, has contributed to creating an artificial perception of scarcity in the market. Such practices have resulted in avoidable price volatility and an increase in both ex-mill and retail sugar prices,” it had added.

All sugar dealers will be required to declare their sugar stocks and update their stock position weekly through the Department of Food and Public Distribution's online portal, it said.

The release further stated that the Department would continue to closely monitor the sugar market and take all necessary measures to ensure adequate availability of sugar at reasonable prices.