The curbs, with some retailers limiting purchases to 3 kg to 5 kg, come as packaged food makers face higher costs not just on account of sugar but also edible oil, putting pressure on margins at a time when demand typically rises sharply. Manufacturers are preparing to raise prices by at least 5% to 6%, with some expecting further increases if sugar prices remain elevated. “We have no choice but to increase prices by about 5%,” said the chief of a leading domestic snack food maker.
ALSO READ | Sugar prices rise by nearly Re 1 per kg to about Rs 64
The price spike has been attributed to an unanticipated fall in sugar production below initial estimates, exports of 800,000 tonnes of sugar and alleged hoarding by some trade intermediaries.
ET BureauThat’s said to have been exacerbated by incorrect production estimates by various industry groupings such as the Indian Sugar and Bio-energy Manufacturers’ Association (ISMA).
Rationing Exercise
India allowed the import of one million tonnes of sugar last week to tame prices.ALSO READ | Wholesale buyers savour softening sugar even as households’ wait for a sweeter deal continues
Big staples companies confirmed to ET that many retail and ecommerce companies are rationing stocks to two-three packs of 1 kg or one pack of 5 kg.
“Many retail chains have put a cap on the number of sugar pouches per customer to enable maximum consumers to buy the commodity from their chain,” said Angshu Mallick, executive deputy chairman, AWL Agribusiness. Wilmar International owns a majority stake in AWL and also in Shree Renuka Sugars.
AWL and Renuka have partnered for the marketing of Renuka’s Madhur brand of sugar.
In Delhi-NCR, quick commerce platform Blinkit has restricted purchases to one pack of 5 kg per transaction for brands such as Mawana premium crystal sugar and Dhampure crystal white sugar, with the disclaimer: “Sorry, we have limited quantities available for this item.”
In Pune, Blinkit is allowing customers to add only three packs of 1 kg each to shopping carts, while Bigbasket has capped purchases at five packs of 1 kg each of specific brands.
On Swiggy Instamart in Delhi-NCR, Supreme Harvest crystal sugar was capped at two packs of 1 kg each and two packs of 1 kg each of Madhur. At a Pune store belonging to supermarket chain D-Mart, a board read: “You are allowed to purchase 5 kg sugar on every invoice. Regret the inconvenience.”
D-Mart, Blinkit, Bigbasket and Swiggy Instamart didn’t respond to queries.
India had allowed exports of 2 million tonnes of sugar — 1.5 million in November and 0.5 million in February — anticipating surplus stocks.
However, the government banned exports in May as domestic prices started rising. Mill-level sugar prices jumped from Rs 41 per kg in the first week of June to Rs 65 per kg, cooling to Rs 58 this week following government measures.
Ahead of key festivals starting with Rakshabandhan later this week, leading packaged foods makers said they plan to pass on increases in the sugar price to consumers.