The Indian government has imposed a strict cap on sugar inventory, limiting dealers to a maximum stock of 400 tonnes until November 30.
The order mandates that traders liquidate any excess holdings by August, a move designed to prevent hoarding and ensure adequate supply in the domestic market.
This regulatory intervention comes as India faces tightening domestic sugar supplies.
The market is under pressure from dual headwinds: crop stress induced by El Niño weather patterns and surging demand for ethanol blending.
These factors have contributed to recent price spikes, prompting authorities to act to stabilize the market.
Industry associations have previously attempted to calm market sentiment, arguing that recent price increases are not supported by fundamental supply realities.