Sugar price rise: Centre caps bulk stocks, clears duty-free imports of 10 lakh tonnes

The Indian government has launched a double-edged effort to secure local sugar supplies and control rising prices before the festive season. On Thursday, August 20, 2026, the Centre imposed stockholding limits on large commercial consumers. It also allowed duty-free imports of raw sugar. These decisions come as prices rise and supplies tighten across the country.

Why sugar prices are climbing

The price hike is driven by a lower opening stock of sugar ahead of the new 2026-27 season starting October 1. Industry estimates place this starting reserve at 40-42 lakh tonnes, while some researchers estimate it even lower at 32-35 lakh tonnes. Both figures fall below the country's estimated domestic need of about 50 lakh tonnes. This tight supply has pushed ex-mill prices to record levels. On Tuesday, average ex-mill rates rose to Rs 5,400-5,500 a quintal, up from Rs 3,900 a year ago. Meanwhile, retail prices have climbed 13 per cent over the past year. Consumers are paying an average of Rs 52.30 a kg as of August 18, compared to Rs 46.34 a year earlier. This rise comes just as demand typically surges for major festivals, including Ganesh Chaturthi, Dussehra, and Diwali.

New stock caps and import rules

To keep prices in check, the Food Ministry has notified the Sugar (Stockholding Limit of Bulk Consumers) Order, 2026. Under this order, bulk consumers who use more than 10 tonnes of sugar a month cannot hold stocks exceeding 15 days of their consumption. This rule applies to sweetmeat sellers, soft drink makers, confectioners, and other food processing units from September 1 until November 30. Central and state government institutions, local bodies, and Union Territory administrations are exempt from these limits. This move follows an earlier limit, effective from August 1 to November 30, which capped stock with sugar dealers at 4,000 quintals for 30 days. To enforce the new caps, the monthly quantity of sugar sold by mills to these bulk buyers will be verified using HSN codes and GST returns. Alongside stock caps, the government has allowed duty-free imports of 10 lakh tonnes of raw sugar under a tariff rate quota. The Directorate General of Foreign Trade announced in a notification: "The import policy for raw sugar is amended to allow 10 lakh MT of duty-free imports under Tariff Rate Quota (TRQ) till October 31, 2026,". The Centre's twin actions aim to improve domestic availability and cap further price increases as the festive season begins.