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Informist, Friday, Jul. 10, 2026

 

MUMBAI – The Department of Food and Public Distribution has imposed stringent rules on sugar mills to limit stockholding and ensure availability of the sweetener in the market. Sugar mills that dispatch less than 90% of their sales quota for a particular month would face a restricted quota for the subsequent month, the department said in a letter to the mills.

 

Earlier, mills were not penalised if they failed to sell at least 90% of their quota, provided they informed the department by the 20th of the month. The government has now removed this provision. 

 

"Accordingly, all sugar mills are informed that if any group/individual sugar mill dispatches less than 90% of quota for a particular month, the release quota for the corresponding month will be restricted up to the percentage of utilisation of quota in the base month," the letter dated Thursday said. The order came into effect from Thursday and will remain in force until further orders.

 

Sugar prices have firmed up since late June as the rainfall deficit during the current monsoon season has added a weather premium to rates of the sweetener. Anticipation of stocks tightening in the coming months also lifted prices.

 

Stocks in the sugar season 2025-26 (Oct-Sept) are estimated to close at 3.5 million tonnes, significantly below 5.0 million tonnes last year. Typically, the sugar market considers 5.0 million tonnes as a "comfortable" closing stock, as supplies for the new season only pick up pace around November.

 

"The government has realised that the market needs more supplies as prices were rising," G.K. Sood, agricultural markets and policy expert, said. "But as it is, the industry was selling more than quota because demand is typically higher than sales quota," he said, adding that some individual mills may be dispatching less.

 

Sood said mills could earlier inform the government that they were unable to find enough demand to meet the prescribed sales quota. The government has now removed that provision, effectively allowing mills to default only 10% of the quota. The government fixes the maximum quantity of sugar available for sale every month to ensure supply, support prices, and help mills clear the arrears of sugarcane farmers.  End

 

Reported by Afra Abubacker

Edited by Himanshi Gupta

 

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