- Sugar prices in India have jumped more than 40% in two months to a record high, prompting the government to allow duty-free imports of 1 million metric tons of raw sugar for the first time in nearly a decade.
- The government imposed stockholding limits on dealers and bulk consumers to cool prices and curb hoarding, with a limit of 400 tonnes for dealers and a 15-day stock limit for bulk consumers.
- On Friday, sugar stocks had declined up to 5% after the government allowed duty-free import of 1 million tonnes of raw sugar, signalling a tight domestic market amid festival demand.
- On Monday, sugar stocks rallied, with several hitting 52-week highs, after the government tightened stockholding limits amid rising sugar prices.
- Indian Sugar Mills Association president Niraj Shirgaokar stated that any shortage was artificial and caused by speculative buying.
- Several sugar stocks hit their 52-week high, rising more than 12 percent, including Dalmia Bharat Sugar and Industries, Dhampur Sugar Mills, and others.
- India produced 27.9 million tons of sugar in the marketing year ending Sept. 30, slightly below annual consumption of 28 million to 28.5 million tons but above last year's output of 26.1 million tons.
- The government has assured that adequate sugar stocks are available in the country to meet domestic demand despite lower-than-estimated production.
Sugar stocks in India have reached 52-week highs as the government tightens stockholding limits to address soaring prices, which have increased by over 40% in just two months. The Indian Sugar Mills Association president, Niraj Shirgaokar, stated that the current price surge is largely due to speculative buying rather than actual supply shortages.2356
Despite a slight dip in production to 27.9 million tons for the marketing year ending September 30, the country is expected to start the new marketing year with 3.5 million tons in opening stocks. This is down from 5 million tons the previous year, but still sufficient to meet domestic demand, which is around 28 million to 28.5 million tons annually.
The government has responded to the price hike by allowing duty-free imports of 1 million metric tons of raw sugar for the first time in nearly a decade. Additionally, a stock limit of 400 tonnes has been imposed on sugar dealers from August 1 to November 30, and bulk consumers are restricted to holding sugar stocks for no more than 15 days of consumption.1
Food Secretary Sanjeev Chopra emphasized that the government is closely monitoring the situation and has assured that adequate sugar stocks are available to meet domestic demand. He also noted that retail prices, which have surged to ₹56 per kg, are expected to stabilize soon.9
The Ministry of Consumer Affairs has taken these measures to prevent hoarding and ensure that prices remain stable for consumers, despite the artificial shortage created by speculation in the market.
“The government allowed duty-free imports of 1 million metric tons of raw sugar, the first such move in nearly a decade, after prices jumped over 40% in two months. Retail prices in Delhi have surged to ₹68 per kg, up 42.22% year-to-date.”
CNBC
