look news india
Just before the beginning of the upcoming festive season in the country, the most important budget of the household kitchen seems to be having a big impact. These days, there is a situation of huge shortage and stock out of sugar on quick commerce and e-commerce platforms that claim grocery delivery in 10 minutes. Big retailers like Blinkit, Swiggy Instamart, Zepto, BigBasket, Amazon and even D-Mart have imposed strict restrictions on bulk purchasing of sugar by customers. Customers are no longer able to add large packets of sugar as per their wish to the online cart. At some places the limit has been fixed at 1 kg per order, at some 2 kg and at some places the maximum is 12 kg. Along with this rationing, the prices of branded sugar on online platforms have also increased to Rs 70 to Rs 80 per kg.
New mathematics of rationing on platforms: Know how much sugar is available on which app
Sugar purchase limits have been fixed differently in different cities and platforms, due to which customers have to resort to multiple apps to fulfill their needs.
A maximum limit of 2 kg per customer has been imposed on the sugar of many major brands on e-commerce giant Amazon. On Swiggy Instamart, permission is being given to buy only two packets of 1 kg or single pack of some selected brands in Delhi-NCR and other major cities. Blinkit has implemented capping of 3kg to 5kg per order in many regions, while larger family packs of 5kg and 10kg are missing from the app entirely or appearing ‘out of stock’.
At the same time, Tata-owned BigBasket has given a maximum discount of up to 12 kg in some selected areas of Delhi-NCR, but in many other cities this limit is limited to 5 kg. On the other hand, many stores of offline retail chain D-Mart have also pasted notices stating that only limited quantity of sugar will be available per invoice.
Prices reach Rs 80 per kg on online platforms
The supply shortage has had a direct impact on prices. The prices of branded and processed crystal sugar listed on e-commerce platforms have increased rapidly in the last few weeks.
Currently, a 1 kg packet of Dhampur White Crystal Sugar is available on Amazon for around Rs 72. On Blinkit, Uttam Sugar is being sold at around Rs 79 per kg and Fortune Sugar at around Rs 75 per kg. A 2 kg pack (1kg x 2) of Madhur Sugar is listed at a price of around Rs 128 to Rs 135 on Swiggy Instamart. On BigBasket, the price of Mawana Premium Crystal Sugar has reached Rs 80 per kg, while BB Popular Sugar is available at around Rs 71 per kg. Even in the retail market, the average prices of common sugar, which were earlier Rs 45 to Rs 48 per kg, have crossed Rs 55 per kg.
Why did the sugar crisis arise and why was the limit imposed?
According to market experts and agri-commodity analysts, there are mainly three major reasons behind this shortage:
The first reason is the sudden surge in demand ahead of big festivals like the upcoming Ganesh Chaturthi, Navratri and Diwali. During this period, the consumption of sweets and dishes in homes increases manifold, due to which common consumers and small confectioners start stocking up in advance.
The second reason is Quick Commerce’s ‘dark store’ model. Quick commerce companies operate from local warehouses (dark stores) with limited space. If a single customer places a bulk order of 20 or 30 kg of sugar, the entire dark store in that area becomes empty and the product becomes ‘out of stock’ for the remaining hundreds of customers. Therefore, this rationing has been implemented to maintain stock availability at the micro-level and to deliver essential goods to all customers.
The third reason is supply pressure and fear of hoarding in wholesale markets. Fluctuations in production estimates were seen during the last crushing season in some major sugarcane producing states of the country. The platforms have also taken this step to prevent possible profiteering and hoarding by wholesalers.
Government’s big action for relief in domestic market
To prevent sugar prices from spiraling out of control during the festive season and to provide relief to the general public, the Central Government has immediately taken strict policy steps. The government has approved duty-free import of 10 lakh tonnes (1 million tonnes) of raw sugar to increase domestic availability. This import quota will be completed by next October, due to which sugar will be ready from the refinery and reach the retail market quickly.
Along with this, the Ministry of Food and Public Distribution has reduced and tightened the stock holding time limit for bulk buyers, mills and large traders. The government has clarified that there is sufficient buffer stock of sugar in the country and the production figures are capable of meeting the demand. As soon as the imported consignment hits the market, there is full hope that the supply chain bottlenecks will be removed and prices will soften.
What is the impact on consumers and small businessmen?
The biggest impact of this purchase limit imposed on e-commerce platforms is on large joint families, wedding organizers and small caterers. Families who need 15 to 25 kg of sugar now have to order small quantities from different apps, causing them to pay delivery fees and handling charges again and again.
As a result, urban consumers dependent on quick commerce are now once again turning to their nearest traditional kirana stores and wholesale galla mandis, where sugar is easily available in bags and loose weight without any restrictions.