Indian Government Allocates 16 Lakh Tonnes of Sugar for Sale Amid Price Surge from October 13-31.

The Indian sugar market is experiencing significant volatility as ex-mill prices have surged nearly ₹1,000 per quintal over the past 10 days, prompting the government to allocate 14 lakh tonnes (lt) for sale in the second fortnight of October. Retail prices have started to reflect this trend, with sugar now being sold at ₹65 per kg in some markets, up from ₹60 just days earlier. The government’s early quota announcement aims to address rising consumer demand in anticipation of the Diwali festival, scheduled for November 8.

This price spike is primarily driven by supply-side pressures, with reports of low stock levels at mills leading to speculation and increased retail prices. Complaints from sugar mills about exhausted sales quotas have exacerbated the situation, raising concerns about meeting forthcoming demand for Diwali, particularly after the Dussehra festival concludes on October 20. The allocation heavily favors key sugar-producing states like Maharashtra and Uttar Pradesh, which are beginning to ramp up crush operations, but the immediate market remains tight with only a limited amount of sugar available for sale.

In the short term, traders and investors should brace for continued price fluctuations as the demand for sugar spikes ahead of festive celebrations. The government’s proactive measures to permit mills to sell their production directly may alleviate some pressure if production meets expectations; however, analysts warn that a balanced supply is still uncertain. With demand projected at 24-25 lt for November, and domestic availability highly contingent on October’s output, the outlook remains cautious. Traders are advised to monitor market conditions closely as they position their portfolios.

Source: Market Source

(Expert Note: This report was independently prepared by the Wealthova Commodities team.)