Sugar Quota System Set For Major Change From September 1; Mills To Get 15-Day Sales Quotas To Prevent Shortages

Starting next month, the government is set to revise the sugar quota system and allocate sales quotas to sugar mills every 15 days to ensure a steady supply in the market. At present, the Food Ministry sets sugar sales quotas for mills on a monthly basis.

The government on Friday said there is no shortage of sugar in the country and reiterated that ex-mill sugar prices have fallen by around 20 per cent in recent days. Retail sugar prices have also started declining.

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Mills Accused Of Holding Back Sugar

During inspections of sugar stocks at mills, the ministry found that some mills had more sugar in stock than declared, while others had sold less than their allotted quota. In some cases, sugar sold by mills at the beginning of the month was picked up by buyers only towards the end of the month. According to the ministry, this contributed to an artificial shortage in the market.

To address the issue, the government will introduce a new sugar allocation system from September 1. Under the new arrangement, mills will have to sell at least 40 per cent of their allocated sugar during the first week of September, with the remaining quota to be sold in the following week. The ministry may also release additional reserves if required to ensure sufficient availability in the market.

Mills Directed To Dispatch Sugar Within 7 Days

Sugar mills have been instructed to dispatch the sugar they sell within seven days. Bulk consumers have also been asked not to stockpile sugar beyond their immediate requirements.

Meanwhile, the central government has allowed the import of 1 million tonnes of raw sugar until October 31 to help keep prices under control.

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The Food Ministry said the fall in both ex-mill and retail sugar prices indicates that the recent increase in prices was driven by hoarding rather than an actual shortage.

The ministry also said that sugarcane crushing for the 2026-27 marketing season, which begins in October, will start on October 15. Sugar availability is expected to improve once the new season begins, with sugar production estimated to exceed 1 million tonnes in October and reach around 4.5 million tonnes in November.