Sugar stocks fall up to 7%: Dwarikesh Sugar, Triveni Engineering, Uttam Sugar under pressure

Sugar stocks came under heavy selling pressure on Tuesday after the government moved to further cut the amount of sugar dealers can hold, in a bid to curb hoarding and keep domestic prices under control ahead of the festive season.

Dwarikesh Sugar Industries led the decline, falling 7.02% to Rs 48.74. Triveni Engineering & Industries dropped 5.76% to Rs 278.60, while Uttam Sugar Mills lost 5.15% to Rs 296.

Dalmia Bharat Sugar fell 4.53% to Rs 462.20 and Balrampur Chini Mills declined 4.40% to Rs 663. Avadh Sugar & Energy, Dhampur Sugar Mills, Shree Renuka Sugars, Bajaj Hindusthan Sugar and Simbhaoli Sugars were also in the red. EID Parry fell 0.91% to Rs 792.10.

The selling came after the Ministry of Consumer Affairs, Food and Public Distribution announced that dealers will now be allowed to hold a maximum of 2,000 quintals of sugar, against the earlier limit of 4,000 quintals.

The revised limit will take effect from September 15 and remain in place until November 30, 2026. Dealers will also have to clear their stocks within 30 days of receiving them and cannot hold more than 2,000 quintals at any location in the country.

The government had introduced the 4,000-quintal limit only from August 1. The latest move therefore cuts the permitted inventory by half as authorities look to prevent excessive stock accumulation and ensure adequate supplies in the domestic market.

Sugar stocks fell much more sharply than the broader market. At 3:10 pm, the Sensex was down 210 points, or 0.27%, at 76,747, while the Nifty was lower by 100 points, or 0.42%, at

23,980. Market breadth was also weak, with 1,421 stocks advancing against 2,507 declines.

There is, however, an exemption for Kolkata and its extended metropolitan region, where dealers will continue to be allowed to hold up to 4,000 quintals. The government said the region serves as a distribution hub, sourcing sugar from Uttar Pradesh and Maharashtra for markets across eastern and northeastern India.

The latest restriction follows several steps taken by the government over the past few weeks to improve sugar availability. In August, authorities tightened inventory limits for large consumers and later allowed duty-free imports of 1 million metric tonnes of raw sugar until October 31.

The measures come at a time when tighter domestic supplies have pushed sugar prices higher, with the government also looking to prevent stockpiling ahead of the festive season.

For sugar companies, the immediate concern is how the tighter dealer limits affect inventory movement and domestic prices. The government's continued intervention also suggests that keeping supplies and prices under control remains a priority as festival demand picks up.

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