Ex-mill sugar prices have dropped by about 20% in recent days, and retail prices have begun to ease as well. The government says the earlier spike was driven more by hoarding and speculation than by any real shortage.
Officials have been watching prices, stocks and movement across the country. A nationwide physical verification of mill stocks found comfortable supplies. In several cases, mills were holding more sugar than they had declared in monthly returns. Some mills were also selling less than their allotted monthly quota — a practice that can squeeze the market even when warehouses are full.
Another bottleneck showed up in timing. Sugar sold early in the month was sometimes lifted only toward month-end, creating an artificial squeeze. From September, the monthly quota will be replaced by a fortnightly allocation. Mills must sell at least 40% of each allocation in the first week and the rest in the following week. Sold sugar must leave the mill within seven days. Bulk buyers have been told not to stock more than they need for operations.
The government says the new system will let it watch demand and supply more closely, release extra quota if needed, and keep sugar moving from mills to dealers to shops.
Fresh supply is also coming. Crushing for the new season starts on 15 October. Officials expect more than 10 LMT of sugar in October and about 45 LMT in November. Mills will be allowed to sell October production without restriction. Operational mills in Karnataka and Maharashtra are expected to add around 2 LMT in September.
The message to consumers is blunt: there is no shortage, panic buying is unnecessary, and supplies should stay adequate through the festive season if the new rules work as intended.
