Centre Doubles Bulk Sugar Stocks Only for Imports

The Centre on Friday doubled the bulk sugar stockholding limit to 30 days, with the extra 15 days allowed only from specified imports. Retail sugar has slipped from Rs 65 a kg in August to Rs 58.50, about 10 percent, while mill-gate prices are down nearly 25 percent, the food department said.

Sugar bought from the open market, including from domestic mills, stays capped at 15 days of use. The longer warehouse is a pipe into duty-free imported lots, not a new bid for mill sugar as sweets demand rises.

Extra Warehouse Space Is Reserved for Import Sugar

Bulk users who take more than 10 tonnes of sugar a month as a raw material had been held to 15 days of consumption. That class covers confectionery and biscuit plants, soft-drink and beverage makers, sweetmeat sellers and halwais. They asked for a higher limit before the festival run and for the right to buy straight from importers holding Advance Authorisation Scheme and Tariff Rate Quota sugar.

The department granted both asks in one tightly cut form. Total cover can now run to 30 days, but the additional stock must be imported under those two routes. Open-market purchases stay at 15 days of use.

A plant that burns 100 tonnes a month may hold 50 tonnes from domestic factories and another 50 tonnes from refiners who brought in raw sugar at zero duty. The extra pile cannot be topped up from a Maharashtra or Uttar Pradesh mill gate.

The measure is intended to strike a balance between the interests of bulk consumers and the need to maintain stability in the domestic sugar market. It will provide greater operational flexibility to genuine industrial consumers during the upcoming festival season while ensuring that additional stocks are sourced from imported sugar rather than placing undue pressure on domestic stocks.

Department of Food and Public Distribution, September 18 statement

That wording is the policy. Factories get a fatter warehouse if they take the imported lot. Mills do not get a second festive bid from those extra 15 days.

Seventeen Days of Tight Bulk Limits

The 15-day cap was not an old rule being gently loosened. It was imposed in mid-August, when mill-gate rates jumped and the government opened a duty-free raw-sugar window, and it took effect on September 1. Friday’s change came 17 days later.

Food Secretary Sanjeev Chopra had already called the August mill-gate spike unjustified. He said mills had jacked up rates and that, by late August, ex-mill prices had cooled to Rs 55 a kg. Production for the season ending this month has been put near 306 lakh tonnes, against an earlier estimate near 343 lakh tonnes, with domestic use around 280-285 lakh tonnes.

THE SUGAR CONTROL CALENDAR

1. July 28, 2026: The Centre notifies a dealer cap of 4,000 quintals and a 30-day holding period under the Essential Commodities Act, in force from August 1 to November 30.
2. August 20, 2026: The Directorate General of Foreign Trade opens a 10 lakh tonne duty-free raw-sugar tariff rate quota till October 31, and the food department sets a 15-day bulk-user cap from September 1 to November 30.
3. August 28, 2026: The TRQ committee allocates 7,97,450 tonnes against the 10,00,000 tonne quota, leaving 2,02,550 tonnes unclaimed.
4. September 1, 2026: The 15-day bulk cap takes effect, and DGFT reopens the leftover 2,02,550 tonnes for millers and refiners with their own refining plants.
5. September 14, 2026: DGFT extends the deadline to surrender unused TRQ to September 30, for a fee equal to 0.5 percent of CIF value.
6. September 18, 2026: Bulk users may hold 30 days of sugar if the extra 15 days is AAS or TRQ material; domestic open-market stock stays at 15 days.

Through that same stretch, sugar exports remain prohibited until September 30, except for a few carve-outs such as Advance Authorisation and existing pipeline cargo. India shut the export door in May, then opened an import slice in August, then spent September trying to get that slice into factories.

Shops Have Not Matched the Mill-Gate Cut

The department’s own scoreboard is blunt. Retail sugar is down around 10 percent from an August peak of Rs 65 a kg to Rs 58.50. Mill-gate prices have already fallen by nearly 25 percent over the same stretch. The slower shop cut, it said, shows the mill-gate drop has not fully moved through wholesalers and retailers.

Chopra repeated that point on Friday in a joint meeting with the Indian Sugar & Bio-energy Manufacturers Association, the National Federation of Cooperative Sugar Factories and sugar trade bodies, including the All India Sugar Trade Association. He underlined that the mill-gate reduction has not yet shown up fully in retail prices. The government appealed to traders, wholesalers and retailers to pass the mill-gate cut through at once, and asked the whole chain to keep sugar and sugar-based sweets in reach through the festivals.

That 15-point gap between a 25 percent mill-gate fall and a 10 percent shop fall is the margin the Centre is now leaning on. Doubling industrial warehouses does not close it if the extra tonnes never come from a domestic mill.

THE LIVE STOCK RULES

The three ceilings run together until November 30. A biscuit line can now park a second fortnight of cover, but only if that fortnight is imported sugar. A dealer still cannot sit on more than 4,000 quintals, which is 400 tonnes.

Why 2.02 Lakh Tonnes of Quota Still Sit Idle

The 10 lakh tonne TRQ was sold as a shock to a tight market. Duty on that raw sugar is nil till October 31, and holders must refine it in their own plants. For every 1.05 kg of raw sugar brought in, they must make and sell 1 kg of refined sugar at home by that date. Preference went to applicants who promised to land cargo by October 15.

The first application round did not clear the quota. Against 10,00,000 tonnes, millers and refiners sought and received 7,97,450 tonnes on August 28. That left 2,02,550 tonnes on the table. DGFT invited a second round on September 1, using daily batches cut off at 5:30 pm, with pro-rata cuts if a day’s demand overshot what remained.

Two weeks later the same office was still dealing with unused paper. Public Notice 30, dated September 14, lets TRQ holders surrender leftover quantity until September 30 if they pay 0.5 percent of the CIF value of what they give back. A quota written to flood the festive market is, in part, still looking for users.

THE IMPORT WINDOW IN FIGURES

• The quota: 10 lakh tonnes of raw sugar may enter duty-free until October 31.
• First allotment: 7,97,450 tonnes were allocated on August 28.
• Still open: 2,02,550 tonnes were put up again on September 1.
• Give-back fee: Unused quota can be surrendered until September 30 for 0.5 percent of CIF value.

Friday’s stock change is the demand tool that quota was missing. Bulk users who want more than 15 days of cover have to buy from the refiners who hold that imported raw sugar. If those refiners still cannot place the sugar, the extra warehouse does not fill, and mills still do not see a new domestic bid.

Import logistics, not another mill-gate rally, now set the legal ceiling on how much extra sugar a factory can keep. Cargo that lands late, or quota that is surrendered, leaves the 30-day number as a permission slip without physical stock behind it.

Confectioners Get Flexibility With a Weekly Filing

The users who asked for the change are the same plants that make the festive goods: packaged sweets, biscuits, drinks, and the halwai trade. They get operational room through Navratri, Dussehra and Diwali, which is the point of a 30-day cover when lines cannot stop for a missing tanker of sugar.

They also pick up a reporting duty that dealers already live with. Bulk consumers must make a weekly Friday stock disclosure on the food department’s portal. Failure to register, or late or wrong numbers, can draw action under the Essential Commodities Act, the same law that sits under the dealer order.

WHO MUST FILE EVERY FRIDAY

• The threshold: Anyone using more than 10 tonnes of sugar a month as a raw material.
• The plants: Confectioners, biscuit and other food processors, and soft-drink and beverage makers.
• The trade: Sweetmeat sellers, halwais, and other institutional buyers at the same 10-tonne mark.
• The split: 15 days from the open market, plus 15 days only from AAS or TRQ sugar.

Direct purchase from TRQ and AAS holders was their other request, and that is now built into the extra 15 days. The catch travels with the permission. A plant that cannot get imported refined sugar is back on a 15-day domestic diet, which is where it stood on September 1.

A Separate Ceiling on Dealers

The bulk-user change does not touch the dealer order that has been running since August 1. Under S.O. 4165(E) of July 28, no dealer may hold sugar more than 30 days from the date of receipt, or keep more than 4,000 quintals at any place in the country. States may set tighter limits, not looser ones. PDS and government-account stocks are exempt.

Dealers already have to declare stocks on the same portal. The July letter to chief secretaries asked states to check portal numbers against physical piles, and warned that wrong or late filings would be treated as a serious breach. That 4,000-quintal dealer stock ceiling still sits on the wholesale layer that Chopra says has not passed the mill-gate cut through to shops.

A factory can now legally hold more sugar than a dealer, if half of that factory stock is imported. The trade that moves mill sugar into kirana tins remains bound to 400 tonnes and a 30-day clock. If retail is sticky, that is the layer the department is still squeezing, not the mill gate.

Cane Growers Are Due Rs 365 a Quintal From October

Chopra told Friday’s meeting that the farmer and the consumer are the two pillars of sugar policy. From October 1, when the 2026-27 season starts, cane growers are due the Fair and Remunerative Price of Rs 365 a quintal at a basic recovery of 10.25 percent. That is Rs 10, or 2.81 percent, above the Rs 355 rate for 2025-26, and 100.5 percent above the Rs 182 a quintal cost of production used in the Cabinet note.

A premium of Rs 3.56 a quintal applies for each 0.1 percent of recovery above 10.25 percent. Mills below 9.5 percent recovery still pay a floor of Rs 338.3 a quintal. The Cabinet Committee on Economic Affairs, chaired by Prime Minister Narendra Modi, cleared that package in May, citing about 5 crore cane farmers and 5 lakh mill workers.

Mills will buy that dearer cane while mill-gate sugar has already been pulled down by nearly 25 percent from the August spike, and while the extra festive offtake the government has just authorised is steered toward imported refined lots. The department said it will keep watching availability and prices and will step in again if it has to.

Factories that want 30 days of cover will be bidding for refined lots from the duty-free raw-sugar window, not for another pile from a domestic mill.