Sugar stocks extended their losses on Wednesday, September 2, as investors continued to react to the government’s decision to further tighten stockholding limits for dealers. The move is aimed at curbing hoarding and speculative trading while keeping domestic sugar prices under control.
The sector has witnessed sharp selling pressure over the past two trading sessions. and have each fallen around 8%, while Dalmia Bharat Sugar has shed around 7%. Avadh Sugar & Energy has declined around 6%, while Dhampur Sugar Mills has lost over 6%.
Among other stocks, Shree Renuka Sugars has fallen 5%, Bajaj Hindusthan Sugar has declined 4%, and EID Parry has lost 2% over the two sessions.
Sugar stocks remain under pressure today
The selling continued in Wednesday’s trade, with Balrampur Chini Mills declining 4.5% to ₹638.60. fell 3.6% to ₹451, while Dhampur Sugar Mills lost around 3% to ₹168.03.
declined over 2% to ₹806, while Shree Renuka Sugars shed 2% to ₹23.73. Dwarikesh Sugar Industries fell 1.7% to ₹48.31.
Bajaj Hindusthan Sugar was down 1.6% at ₹21.57, while also declined 1.6% to ₹782.15.
The continued weakness reflects the pressure on sugar stocks following the government’s latest measures to tighten stockholding limits for dealers. The restrictions are part of the government’s broader efforts to prevent excessive accumulation of sugar stocks, discourage speculative activity and ensure adequate supplies in the domestic market.
Why are sugar prices rising?
came under sharp selling pressure on Tuesday after the government tightened stockholding limits for dealers, reducing the maximum quantity of sugar they can hold to 2,000 quintals from 4,000 quintals. The revised limit will take effect from September 15 and remain in force until November 30, 2026.
Under the new norms, dealers will not be allowed to retain sugar stocks for more than 30 days from the date of receipt. They will also be prohibited from holding more than 2,000 quintals at any point in time or at any location.
The latest restriction marks a further tightening of the government’s earlier intervention. From August 1, sugar dealers across the country had been permitted to hold up to 4,000 quintals of sugar. The new decision cuts this ceiling by half as the government seeks to prevent excessive accumulation of stocks and ensure adequate supplies for consumers at reasonable prices.
The government has, however, made an exception for Kolkata and its extended metropolitan areas. The existing 4,000-quintal stockholding limit will continue in these areas because of the region’s importance as a distribution hub. Kolkata receives sugar from Uttar Pradesh and Maharashtra and serves as a key supply centre for eastern and northeastern India.
The latest intervention comes amid a series of measures introduced by the government in recent weeks to improve sugar availability and control elevated domestic prices. In August, authorities tightened inventory restrictions for large consumers. This was followed by permission for duty-free imports of 1 million metric tonnes of raw sugar until October 31.
Disclaimer: This story is for educational purposes only. Please consult with an investment advisor before making any investment decisions.