The Centre’s decision to raise the first‑half October sugar sales quota by 100,000 tonnes to 1.40 million tonnes comes after a 13% YoY jump in September’s quota and a 2.55 million‑tonne cut in October 2024.
Retail sugar prices have slid 11‑12% from their July‑August highs, settling at ₹57.50 per kg, while ex‑mill prices have fallen almost 30% to ₹4,450 per 100 kg from ₹6,000‑₹6,400 levels earlier.
Industry analysts say the fortnightly quota system should dampen price spikes and prevent speculative buying that previously pushed prices up during monsoon months.
Mills could see steadier margins as input costs ease, though the lower retail price may squeeze final sales revenue.
The government has also allowed raw sugar imports and imposed stockholding limits to further stabilise supply, a move that could improve earnings outlook for listed sugar companies like J K Sugar and others.
Investors should watch the next quarterly report for guidance on margins and capacity utilisation as demand ramps up for Navratri, Durga Puja and Diwali.