Sugar stocks fell sharply on September 1 after the government further tightened stockholding limits for dealers, stepping up efforts to curb hoarding and speculative trading and keep domestic sugar prices in check. Dwarikesh Sugar Industries dropped 7 percent, while Triveni Engineering, Uttam Sugar Mills and several other stocks lost 3-6 percent.

The government has reduced the maximum quantity of sugar that dealers can hold to 2,000 quintals from 4,000 quintals, effective September 15, the Ministry of Consumer Affairs, Food and Public Distribution said on Tuesday. The revised limit will remain in force until November 30, 2026.

Under the new rules, dealers will not be permitted to hold sugar stocks for more than 30 days from the date of receipt. They will also be barred from holding more than 2,000 quintals at any time and at any location in the country.

Sugar stocks traded firmly in the red following the announcement. Dwarikesh Sugar Industries was the biggest loser among the pack, falling 7.02 percent to Rs 48.74, while Triveni Engineering & Industries declined 5.76 percent to Rs 278.60.

Uttam Sugar Mills dropped 5.15 percent to Rs 296, while Dalmia Bharat Sugar fell 4.53 percent to Rs 462.20 and Balrampur Chini Mills declined 4.40 percent to Rs 663. Avadh Sugar & Energy was down 4.13 percent at Rs 820 and Dhampur Sugar Mills lost 3.46 percent to Rs 172.99.

Shree Renuka Sugars declined 2.93 percent to Rs 24.17, Bajaj Hindusthan Sugar fell 2.85 percent to Rs 21.83 and Simbhaoli Sugars lost 1.90 percent to Rs 8.27. EID Parry was down 0.91 percent at Rs 792.10.

The losses were sharper than the broader market decline. At 2:33 pm, the Sensex was down 210 points, or 0.27 percent, at 76,747, while the Nifty fell 100 points, or 0.42 percent, to 23,980. Market breadth was weak, with 1,421 shares advancing against 2,507 declining.

The government had introduced a 4,000-quintal stockholding limit for sugar dealers across the country from August 1. The latest move halves that ceiling as authorities seek to prevent excessive accumulation of stocks and ensure adequate supplies to consumers at reasonable prices.

An exception has been made for Kolkata and its extended metropolitan areas, where the existing 4,000-quintal ceiling will continue. The government cited the region's role as a distribution hub, sourcing sugar from Uttar Pradesh and Maharashtra and supplying eastern and northeastern India.

The latest intervention follows a series of measures taken by the government in recent weeks to boost supplies and rein in elevated sugar prices. In August, the government had tightened inventory restrictions for large consumers and subsequently allowed duty-free imports of 1 million metric tonnes of raw sugar until October 31.

The measures came after tightening supplies drove domestic sugar prices sharply higher ahead of the festival season. The government's latest stockholding restrictions are aimed at improving the availability and movement of sugar in the domestic market while discouraging hoarding and speculative activity.