The central government has capped sugar stockholding limits for warehouses as prices hit record highs ahead of India's festive season.
Ordering dealers who use more than 10 metric tonnes of sugar a month cannot hold inventories for no more than 15 days, according to the revised limits.
The cap is applicable from September 1 to November 30 and the government has said that it will monitor sugar quantity sold on a monthly basis.
Domestic sugar wholesale prices had crossed Rs 6,000 per quintal in cities like Kanpur and Kolkata. On an average, they exceeded Rs 5,000 per quintal according to data from the Muzzafarpur and Kolhapur Belts.
The prices have risen 10% in August alone. Sugar prices are expected to ease after government's latest decision, while more announcements for sugar security may be in the pipeline.
Indian inventories are still on the lesser end of the El-Nino impact. Going ahead, the government can look into lowering taxes on sugar imports-agencies. Although, Ethanol diversion may become a concern.
Global sugar prices have touched a 15-month high and might even surge further as Europe's output expected to fall to lowest in a decade.
Production in Thailan is impacted by El Nino impact, while Brazil's output has also been lesser than standard.
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Sugar Stocks In Focus
Sugar stocks had zoomed after both global and domestic rates of raw sugar hovered near fresh highs. However, government's new cap might trigger profit booking in stocks like Balrampur Chini, Shree Renuka Sugar, Triveni Engineering among others.
The shares have delivered strong gains from their 2026 lows, with most major names seeing a sharp recovery amid expectations of tighter global supplies and firm sugar prices.
Dalmia Bharat Sugar has been the biggest gainer among the stocks listed, rising 80% from its 2026 low. Balrampur Chini has gained 68%, while Triveni Engineering has rallied 42% over the same period.
Other sugar stocks have also moved higher, with Shree Renuka Sugar gaining 18% and EID Parry rising 16% from their respective 2026 lows. The broad-based rally highlights the strong momentum in the sector ahead of the festive season.
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