Govt to impose strict penalties on sugar mills violating stock limits

In a directive issued to mills, govt said it has found repeated violations by some group and individual sugar mills despite previous warnings, prompting the issuance of new, stricter guidelines

The government will take stringent action against the sugar mills violating monthly stock holding limit orders, the Food and Consumer Affairs Ministry said on Friday.

The ministry prescribes monthly stock holding limits for white/refined sugar to prevent hoarding and control price increases. For April, the stock holding limit is set at 2.35 million tonnes.

In a directive issued to mills, the ministry said it has found repeated violations by some group and individual sugar mills despite previous warnings, prompting the issuance of new, stricter guidelines.

Key penalties include: for first-time violations, 100 per cent of excess sugar sold will be deducted from the subsequent month's release quota.

Subsequent violations will see progressively higher deductions: 115 per cent for the second, 130 per cent for the third, and 150 per cent for the fourth violation.

Mills dispatching less than 90 per cent of quota without intimation will have restricted future allocations.

Multiple violations in a sugar season will disqualify mills from additional releases and government scheme benefits.

"No benefit under any scheme of DFPD and DSVO, including export quota, as and when issued, may be granted to the sugar mills which violate stockholding limit orders more than two times in a sugar season, starting from the month of third instance," the directive said.

Ethanol procurement allocations may also be reduced.

The ministry will distribute the deducted quantity among compliant sugar mills while issuing monthly stockholding orders.

The guidelines, effective April 1, 2025, aim to ensure consistent supply and price stability in the sugar market.