Retailers Are Limiting Sugar Sales : Due to shortage of supply ahead of major festive season in India, retailers like D-Mart and instant commerce platforms like BigBasket, Blinkit and Swiggy Instamart have started imposing restrictions on sugar purchases for consumers. This shortage has led to a 40% increase in retail prices in the last two months. Some retailers have limited purchases to 3 to 5 kg. The move comes at a time when packaged food companies are facing higher costs not only for sugar but also for cooking oil.
This is putting pressure on companies’ profits, especially in these times of rapid demand. Producers are bracing for at least a 5% to 6% price hike, and some expect more hikes if sugar prices remain high. “We have no option but to increase prices by about 5%,” said the head of one of the country’s major snack food manufacturers.
The price hike was initially attributed to lower-than-estimated sugar production of 800,000 tonnes of sugar exports and alleged hoarding by some middlemen. The situation is said to have been worsened by incorrect production estimates by various industry groups such as the Indian Sugar and Bio-Energy Manufacturers Association (ISMA).
The process of rationing
India last week allowed the import of 1 million tonnes of sugar to control prices. According to an ET report, many retail and e-commerce companies are limiting stock to two or three 1 kg packs or one 5 kg pack.
AWL Agribusiness Executive Deputy Chairman Anshu Mallick said in a media report that many retail chains have imposed limits on the number of sugar bags per customer to encourage more customers to buy from their chains.
Wilmar International owns majority stake in AWL and Shree Renuka Sugars. AWL and Renuka have partnered to market Renuka’s ‘Madhura’ brand of sugar.
In Delhi-NCR, quick commerce platform Blinkit limits purchases to 5 kg packs per transaction for brands like Mawa’s Premium Crystal Sugar and Dhampur Crystal White Sugar, with the disclaimer: “Sorry, we have limited availability of this item.”
Blinkit in Pune is allowing customers to add only three 1-kg packs to their shopping cart, while BigBasket limits purchases to five 1-kg packs for a particular brand.
At Swiggy Instamart in Delhi-NCR, a limit of two 1-kg packs for Supreme Harvest Crystal Sugar and two 1-kg packs for Madhur Sugar was also set.
A board at the Pune store of supermarket chain D-Mart read: “You can buy 5 kg of sugar per invoice.” We apologize for the inconvenience.
Export ban imposed
India allowed the export of 2 million tonnes of sugar in anticipation of surplus stocks. This includes 1.5 million tonnes for export in November and 0.5 million tonnes in February. However, the government banned exports in May due to rising domestic prices. Mill-level sugar prices rose to Rs 65 per kg from Rs 41 per kg in the first week of June, but fell to Rs 58 this week following government measures. Ahead of major festivals like Rakshabandhan this weekend, major packaged food manufacturers said they would pass on the increased sugar prices to consumers.