Sugar stocks came under selling pressure on August 25 after a sharp rally earlier this month, with shares of Balrampur Chini Mills, Bajaj Hindusthan Sugar and Shree Renuka Sugar declining as much as 3.5%. The sector had gained 20-30% in August amid a surge in domestic sugar prices.
Govt Eases Raw Sugar Import Norms
The government has introduced greater flexibility for companies importing raw sugar under the duty-free tariff-rate quota (TRQ). It had previously permitted imports of up to 1 million tonnes until October 31, 2026, with importers required to process the raw sugar into white sugar and sell it domestically before the deadline.
The Directorate General of Foreign Trade has now replaced the fixed deadline with a two-month period beginning from the date the Bill of Entry is filed. The change is intended to give importers more time to refine the commodity and supply it to the domestic market.
The government has also permitted a one-time conversion of certain existing Advance Authorisations into the TRQ system, subject to applicable conditions and repayment of GST exemptions availed during import.
Prices Surge Ahead Of Festive Season
The policy changes come as sugar prices have climbed sharply amid concerns over domestic availability and rising festive demand. Prices increased to Rs 63.05 per kg on August 24 from Rs 48.18 per kg on July 20.
The government has attributed the increase to weaker-than-expected production, weather-related damage, global supply concerns and possible hoarding. It has rejected the diversion of sugar towards ethanol as the main reason behind the price increase.
Domestic inventories are estimated at 3.5-3.9 million tonnes, below the government’s normative buffer of 6 million tonnes.
To discourage stockpiling, the government will halve the stockholding limit for bulk consumers to 15 days of consumption from September 1.
Authorities have also sought transaction-level sales data from sugar mills to monitor prices, volumes and buyers during the festive period.
