Despite low quota, there is little chance of increase in sugar prices
28-Jun-2025 12:22 PM
New Delhi. The Union Food Ministry has fixed a quota of only 22 lakh tonnes of sugar for domestic sale for July 2025, which is the lowest since December 2024. A quota of 22 lakh tonnes of sugar was also fixed for November and December 2024.
The quota set for July 2025 is one lakh tonne less than the 23 lakh tonnes allocated in June and two lakh tonnes less than the 24 lakh tonnes allocated in July 2024. A quota of 24 lakh tonnes was also fixed in July 2023.
In the quarter of October–December 2024, a total free sale quota of about 70 lakh tonnes of sugar was issued, while the quota for January to July 2025 has been fixed at 182 lakh tonnes. The quotas for August and September are yet to be declared, while the new marketing season will begin in October.
Despite the lower quota, domestic demand for sugar remains weak, which has kept prices stable within a narrow range. The ex-factory price of sugar is being reported between Rs 3780 to Rs 4050 per quintal in Maharashtra and Rs 3830 to Rs 4000 per quintal in Uttar Pradesh.
Bulk buyers are limiting their purchases, anticipating a possible drop in prices, while millers are reluctant to reduce prices due to higher production costs. Moreover, there has been no increase in the purchase price of ethanol.
Although domestic sugar production declined by 18 percent to 261 lakh tonnes in the 2024–25 marketing season compared to 2023–24, prices have remained largely stable due to limited demand. With the monsoon season nearing its peak, sugar demand and consumption are expected to decrease further.
Additionally, around 1.50 lakh tonnes of unsold stock from the June quota is likely to be added to July’s allocation, increasing the effective available quota to 23.50 lakh tonnes.
This surplus could put further pressure on prices. Sugar exports have also not shown strong performance. Overall, there appears to be little likelihood of any significant rise in sugar prices in the coming weeks.