Indian Sugar Mill-Gate Prices Ease Following Government Intervention and Duty-Free Imports

Mill-gate sugar prices in India have declined by approximately 25 per cent over the past week after previously surging past ₹6,700 a quintal. The correction follows a series of measures implemented by the Indian government to manage commodity prices and improve supply ahead of the festival season.

Data from the Price Monitoring Division of the Department of Consumer Affairs indicates that retail sugar prices eased to ₹64.33 a kg from ₹65.07 on Wednesday. Despite this decline, prices across major cities continued to range between ₹60 a kg in Mumbai and ₹64 a kg in Chennai. Wholesale prices dropped by ₹50 to ₹300 a quintal, with Kolkata and Hyderabad observing the maximum decrease. Mills' tender rates fell to ₹4,850, while Sonhira Sugars offered 1,400 tonnes at ₹4,900. Resale sugar was quoted at ₹5,040 to ₹5,100 a quintal for S-30 grade.

Uppal Shah, Chairman and Managing Director of JK India eAgriTech Ltd., noted that prices have cooled considerably. He stated that ex-mill trading below ₹5,200 to ₹5,400 per quintal at several locations will soon reflect in the retail market. Sugar prices had rallied in recent months due to tight supplies and weather concerns, breaching ₹6,700 to ₹7,000 ex-mill in multiple places.

To combat the price rise, the government permitted the duty-free import of 1 million tonnes of raw sugar last week. Additional measures included inspections on traders' premises across various states to curb hoarding, monitoring physical stocks at mills, and reducing the stock limit for bulk buyers—those purchasing over 10 tonnes a month—to 15 days of their requirements. These actions were designed to release held-up stocks from bulk consumers and dealers.

According to industry sources, four to five sugar shipments carrying approximately 2 lakh tonnes of sugar have departed from exporting ports and are scheduled to arrive by mid-September. Refineries are expected to supply about 3 lakh tonnes of sugar to the domestic market in September once refined, further improving availability.

Meanwhile, international markets presented mixed trends. October raw sugar futures on the InterContinental Exchange in New York rose to 17.580 cents a pound, with spot prices increasing to 17.62 cents. In London, white sugar decreased to $517 a tonne.

"The recent decline in sugar prices demonstrates how targeted regulatory interventions and timely supply-side adjustments, such as duty-free imports and stock limit monitoring, can effectively stabilize essential commodity markets. For businesses operating in the agricultural and food supply sectors, this situation underscores the importance of maintaining agile supply chains and closely tracking government policy shifts to navigate commodity price volatility successfully." — Dr. Shishir Gupta, Founder & CEO, StartupLanes