Under the order, no sugar dealer will be allowed to hold stocks for more than 30 days from the date of receipt or keep more than 4,000 quintals of sugar in stock at any point. The restrictions have been imposed under the Essential Commodities Act, 1955 and the Sugar (Control) Order, 2025.
The government said the move is aimed at ensuring adequate availability of sugar, protecting consumers and maintaining price stability, while asserting that current price increases are not supported by demand-supply fundamentals.
As per the directive, all sugar dealers will have to declare their sugar stocks and update inventory every week through the Department of Food and Public Distribution’s online portal. The government said it will closely monitor the market and take further measures, if required, to ensure sugar remains available at reasonable prices.
Also Read: Sugar prices hit record highs amid supply concerns in India
The Ministry of Consumer Affairs, Food and Public Distribution said it had found instances of hoarding by traders, dealers and intermediaries, along with speculative transactions and paper trading without the physical movement of sugar from mills.
According to the ministry, these practices created an artificial perception of scarcity, triggering avoidable volatility in ex-mill and retail sugar prices.The Centre reiterated that the country has adequate sugar stocks to meet domestic consumption and said genuine trade and distribution activities would continue without disruption despite the stock limits.
The move comes after sugar prices climbed to record highs over the past month, prompting concerns over supply despite repeated assurances from the government and industry that domestic availability remains sufficient.
The government had already kept July’s domestic sugar sales quota unchanged at 22 lakh tonnes to prevent further price escalation and has been closely managing monthly releases to balance supplies.
Also Read: Sugar stock limits may offer temporary relief but risk disrupting the supply chain, ays industry
Earlier this year, the Centre also banned sugar exports until September 30, 2026, after concerns that lower-than-expected sugar production and weaker cane yields could tighten domestic supplies for a second consecutive season.
However, it had already permitted the export of nearly 16 lakh tonnes of sugar for the 2025-26 marketing year ending September.
On July 17, industry bodies ISMA and NFCSF had urged institutional buyers, wholesalers and retailers to refrain from speculative buying, saying the country had adequate sugar stocks despite the recent rise in prices.
Industry executives had recently told The Economic Times that stock limits could provide immediate relief by discouraging speculative hoarding, though they cautioned that such measures may temporarily disrupt the supply chain if retained for a prolonged period. They argued that the recent spike in prices was largely driven by sugar held in the trade rather than at mills, with most mills having already sold a significant portion of their allocated quota.
According to ICRA‘s latest assessment released on Tuesday, net sugar production for the 2025-26 sugar season is expected at around 28 million tonnes after diversion for ethanol, while closing stocks by September are projected at about 4.3 million tonnes—roughly equivalent to two months of domestic consumption. Although inventories are lower than last year, the agency expects supplies to remain adequate, even as the market remains watchful over the impact of a possible El Nino on the next crop.