Ex-mill sugar prices fall 30% after government measures, retail rates yet to ease
Ex-mill sugar prices have dropped nearly 30% to around ₹47/kg after government measures boosted domestic supplies and tightened stock limits. However, retail prices remain elevated at about ₹64/kg, with industry sources expecting a delay as traders and retailers clear higher-priced inventories.
New Delhi: Ex-mill sugar prices have fallen by nearly 30% to around Rs 47 per kg, from a peak of Rs 67 per kg on August 18, following a series of government measures to ease domestic prices. However, the decline has yet to reach retail consumers, industry sources said, PTI reported.
The sharp fall in ex-mill prices is already being reflected in wholesale markets, but retail prices are expected to take longer to adjust as traders and retailers continue to sell stocks purchased at higher rates.
On Sunday, sugar was selling at an average retail price of Rs 64.23 per kg, compared with a wholesale price of Rs 59.72 per kg.
Industry sources said retailers typically hold 10-15 bags of sugar, each weighing 50 kg. Those holding higher-priced inventory are reluctant to reduce selling prices until the existing stock is exhausted and replaced with cheaper supplies.
“It takes at least ten days to reflect changes in the retail price,” an industry source said.
Why prices fell
The decline in ex-mill prices followed the government’s decision to allow mills that had processed sugar for export to sell the refined sugar in the domestic market. Around 3-3.5 lakh tonnes of such sugar is expected to enter the domestic market over the next two months.
The government has also tightened stockholding rules for bulk consumers. From September 1, consumers purchasing more than 10 tonnes of sugar a month will not be allowed to hold stocks exceeding 15 days of consumption.
The monthly quantities supplied by individual mills to bulk consumers, either directly or through dealers, will also be verified under the new monitoring mechanism.
Industry sources said a price gap of around Rs 2-3 per kg between ex-mill and wholesale prices and Rs 7-8 per kg between ex-mill and retail prices is generally normal.
The government has also opened the door to sugar imports, tightened stockholding norms for bulk consumers and dealers, and earlier restricted sugar exports as part of its efforts to control domestic prices.
The Centre has maintained that adequate sugar stocks are available and has blamed mills for raising prices. However, sugar production estimates for the 2025-26 marketing year (October-September) have been revised down to 306 lakh tonnes, from the earlier projection of 343 lakh tonnes, PTI stated.
Domestic sugar consumption is estimated at around 280-285 lakh tonnes annually.
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Source : ChiniMandi
