The government late on Sunday announced the release of 13 lakh tonnes (lt) of sugar, including 1 lt of the imported commodity, for domestic sales during the first fortnight of September. In comparison, the allocation for the whole of September in 2025 was 23.5 lt.
However, as the trend in retail price movement does not reflect the drop in ex-mill rates, consumers may have to wait some more time, experts said.
Under the fortnightly quota, mills will be required to sell at least 40 per cent of the allocation in the first week and the remaining quantity in the succeeding week,” said Arvind Kumar Rawat, a director in the Food Ministry’s sugar division. This will leave an availability of at least 5.2 lakh tonnes during September 1-7, during which the Janmashtami festival will be celebrated on September 4. The second week will also be equally important due to Ganesh Chaturthi falling on September 14.
Total allocation
The Food Ministry, which regulates the sugar sector, including allocating sales quotas to each mill every month, has approved 245.5 lakh tonnes (lt) until August in the current sugar season that began in October 2023. With the first fortnight quota for September, the total sugar allocation reached 258.5 lt. In the entire 2024-25 season, the government had allotted 275.5 lt of sugar for sales in the domestic market, although it stated that the annual consumption is 285-290 lt.
Sources said that as the season is coming to an end and some mills have exhausted their production, they were not allotted any quantity.
The Order issued by the Food Ministry said that refiners Shree Renuka Sugars and Shri Dutt India will each sell 50,000 tonnes of imported sugar earlier brought under the advance authorisation scheme for re-export. Besides, domestic mills in Uttar Pradesh have got a quota of 4.20 lt, Maharashtra 4.10 lt and Karnataka 1.77 lt.
Traders in a fix
According to the Indian Sugar & Bio-Energy Manufacturers Association (ISMA), domestic consumption in 2025-26 is projected to be 285 lt, while production is expected to be 279 lt (excluding approximately 30 lt diverted toward ethanol). The closing stock on September 30 has been estimated at nearly 36 lt, down from close to 80 lt on July 31.
“The sugar market has already witnessed exceptional volatility during the last fortnight. Market reports indicate that ex-mill prices have fallen by around 18–20 per cent from their recent highs. In some markets, prices that had moved towards ₹6,500 per quintal have subsequently fallen towards the ₹4,800–₹5,000 range,” said Dilip Patil, Managing Director of Samarth SSK Ltd and Co-Chairperson of the Sugar Bioenergy Forum (SBF) under the Indian Federation of Green Energy.
Patil also said that this sharp movement has created both profits and losses among traders and sugar agents. “Many agents normally purchase sugar from factories against orders from buyers and sell it onwards on a commission basis. The recent fall in prices has consequently created a difficult situation for some traders. Those who have suffered losses and do not have sufficient financial capacity to absorb them have agreed to allow the factories to sell the sugar at the prevailing market price, with the trader undertaking to pay the difference between the original agreed price and the actual selling price over time,” he said.
Challenges to lift
Some traders are said to have requested a 15-day extension to the mills, effectively asking to lift the sugar during the first fortnight at the previously agreed price, sources said. However, the latest Order has reminded mills to ensure physical lifting within seven days after sales.
An industry insider, requesting anonymity, said that when the total number of traders registered with the government is around 5,000 and there is a stock limit of 400 tonnes, the maximum sales could be 20 lakh tonnes, assuming all the traders keep the maximum quantity. “So, there may be challenges for traders to lift sugar unless the onward demand is equally strong, as they also have to comply with the stock limit order,” he said.