Indian government allocates record sugar sales quota for September to rein in retail prices

The Indian government has announced 13.5 lakh tonnes (lt) as the sugar quota for sales in the domestic market during September 16-30 period, taking the total quantity to 26.5 lt for whole of September. This is the highest-ever for the month.

Experts view the decision as an effort to cool the retail prices ahead of Dussehra festival, which will be celebrated on October 20. In an order, the Food Ministry said that under the fortnightly quota, mills will be required to sell at least 40 per cent of the allocation in the first week and remaining quantity in the succeeding week.

Sources said that it is applicable only on mills and not on refiners. Mills in the top three sugar producing states have been allocated 10.4 lt or 83 per cent of total 12.5 lt across the country. It includes 4.25 lt (Maharashtra), 4.13 lt (Uttar Pradesh) and 2.02 lt (Karnataka).

Refiners, who were earlier permitted to sell some imported sugar in domestic market, have been allocated 1 lt, same as was in the first fortnight of the month. However, in the second fortnight, Shree Renuka Sugars has been allotted 60,000 tonnes and Shri Dutt India 40,000 tonnes.

Both the refiners were allocated 50,000 tonnes, each in the first fortnight. An industry official said that the 13 per cent increase in the quota for the whole of September from the year-ago period is unprecedented and probably it has been taken as a last attempt to get the prices down since the season closes on September 30.

However, he wondered whether the mills actually sold 40 per cent in the first week of this month out of 13 lt allocation. Millers are divided on demand as some said they had sold the entire quantity whereas some others said they had to show the sales for compliance and actual lifting happened only in the second week.

Taking cognisance of unsold quantity, the Food Ministry’s Order on Tuesday said that after due consideration, it has been decided not to permit sale of the lapsed quantity. “No extension of the first-fortnight quota shall be granted,” it said.

The ministry has also asked the sugar mills which have not been able to sell their complete allocated first-fortnight quota to submit a detailed explanation in next two days, clearly stating the quantity remaining unsold and the reasons for non-sale.

“The explanations so received shall be examined on a case-to-case basis and further action, as warranted, shall be taken,” it said. Similarly, all the sugar mills which have sold the quantity of sugar in excess to the allocated first-fortnight quota shall submit a detailed explanation for violating the limit by September 17.

“Non-complaint (who fails to submit explanation by due date) sugar mills may not be allocated any release for October, 2026,” it warned. After the quota for September 16-30, the total allocation in 2025-26 season (October-September) stands at 272 lt, which is 1.3 per cent lower from 275.5 lt in 2024-25.

However, India’s annual sugar consumption is estimated to be 285-290 lt. Following various measures taken by the Government, including permitting duty-free import of 1 million tonnes of raw sugar, retail prices have dropped below ₹60 a kg since last weekend.

On Tuesday, the all-India average retail price was ₹59.25 against ₹59.57 on Monday and 58.99 on Sunday. Wholesale prices have dropped below ₹5,000 a quintal in Delhi, while it was around the level in other major cities. However, in Chennai, prices were ₹5,600.

Mill-level prices have dropped sharply to around ₹4,500 a quintal in Maharashtra, while they have dropped by ₹400-500 in Gujarat to levels of around ₹4,600. In Uttar Pradesh, mill-level prices are beginning to ease from ₹4,900 witnessed last week.

In the global market, raw sugar futures on InterContinental Exchange (ICE), New York, dropped below 18 cents a pound ($400 a tonne) on Tuesday, while for cash, the commodity was available at $18.16 cents ($403.55). In London, December white sugar futures were quoted ast $529.1 a tonne.