Govt Restricts Bulk Consumers to 15-Day Sugar Inventories Amid Rising Prices

The Centre has tightened sugar stockholding limits for bulk consumers amid a sharp rise in prices ahead of the festive season and directing those consuming more than 10 metric tonnes a month to hold inventories for no more than 15 days.

According to a notification issued by the Ministry of Consumer Affairs, Food and Public Distribution, the new restriction will come into effect from September 1 and remain in force until November 30.

Under the order, no bulk consumer using or consuming more than 10 metric tonnes of sugar a month as raw material for production, consumption or use can hold stocks exceeding 15 days of such consumption.

The government has defined bulk consumers to include confectioners, soft drink manufacturers, food processing industries, sweetmeat sellers and other institutional buyers consuming at least 10 metric tonnes of sugar a month on average during the last one year, excluding the current month.

However, institutions belonging to the central or state governments, Union Territory administrations and local bodies have been exempted from the order.

In addition, the government will verify the monthly quantity of sugar sold by each sugar mill to bulk consumers either directly or through dealers.

While sugar consumption will be determined with reference to Goods and Services Tax (GST) returns filed by sellers or buyers using the relevant Harmonised System of Nomenclature (HSN) code for sugar.

The government's decision comes after it directed dealers to hold sugar stocks for no more than 30 days in an effort to improve market supplies.

Despite the earlier stockholding restrictions on dealers, sugar prices have risen sharply.

The average retail price of sugar rose 13 per cent year-on-year to Rs 52.30 per kg on August 18 from Rs 46.34 per kg, according to the government data.