Capping may be imposed on the maximum price of sugar! Wholesale prices fell by ₹ 500, shares rose by 10% due to government intervention and supply action: Know the full inside story Sugar Price Capping and Stock Rally

The Central Government has intensified preparations to take multi-level policy steps to control the sudden rise in retail and wholesale prices of sugar ahead of the upcoming festive season. According to reports coming from market sources and policy circles, to prevent unfair profiteering in the domestic market, imposition of indicative or direct price capping on the maximum selling price of sugar and adjustment in the monthly release quota of mills is being considered. Meanwhile, wholesale mandis have seen an improvement of ₹400 to ₹500 per quintal from record levels after the government reduced stock limits for bulk consumers to check hoarding and allowed duty-free import (TRQ) of 10 lakh metric tonnes of raw sugar. On the other hand, on the basis of strong realization of mills and festive demand, shares of Chinese companies have jumped by 10% to 13% in the stock market.

3 big policy decisions of the government to control prices

Ministry of Food and Public Distribution has taken aggressive steps keeping in mind the increasing demand in the sweets and food processing industry during Ganesh Chaturthi, Dussehra and Diwali:

• 1. Reduction in stock limit by 50%: Reduction in maximum inventory holding limit from 30 days for large industrial and institutional buyers (such as beverages, confectionaries and sweetmakers) with consumption more than 10 MT per month from September 1 to November 30. 15 days Has been done.

• 2. Duty-Free Raw Sugar Import (TRQ): A system of zero import duty under tariff rate quota has been implemented to immediately increase domestic supply by importing raw sugar from international markets and processing it in local refineries.

• 3. Early Crushing Season: Sugar mills of Uttar Pradesh and Maharashtra have been instructed to start the 2026-27 crushing season 10 to 15 days earlier (in early October) so that the arrival of new sugar in the market can start on time.

Fluctuations in wholesale markets: Prices slipped from record high of ₹ 5,800

During August, sugar prices in the wholesale markets of Delhi, Muzaffarnagar, Kanpur and Kolkata reached historic levels of ₹ 5,800 to ₹ 6,000 per quintal, due to which sugar started selling at ₹ 58 to ₹ 65 per kg in the retail market.

The government’s strict monitoring and 15-day stock limit rule has curbed speculation and unnecessary hoarding. Due to unloading of excess stock by wholesalers, prices per quintal in major North Indian mandis have softened by ₹ 300 to ₹ 500, which has raised hopes of relief in retail prices as well.

Why did Chinese companies rise by 10% in the stock market?

Sugar stocks on Dalal Street witnessed strong buying by investors amid volatility in the commodity market and government regulations:

• Balrampur Chini Mills: Trading at new levels with intraday gains of 10% to 13%.

• Bajaj Hindustan Sugar: A jump from 8.7% to 9.3%.

• Dwarikesh Sugar: A strong rise from 6.5% to 12.6%.

• Shree Renuka Sugars, Mawana Sugars and Triveni Engineering: Strength in the range of 5% to 10%.

Market analysts believe that ex-factory rates (Ex-Mill Price Realisations) received by mills remain quite strong due to lower production in the last crushing season, diversion of feedstock for ethanol blending (E20) and strong demand during the festive season. Even if the government imposes capping or monitoring of prices, mills’ margins and cash flows are expected to remain better in the current quarter, maintaining investor confidence in the sugar sector.