Archive · 22 Aug 2026
Government Rejects Ethanol Link as Sugar Prices Rise, Permits Imports
Sugar has become more expensive in India recently.
The government says making ethanol from sugar is not the reason.
It says there is enough sugar for people to buy.
Sugar prices rose by about ₹8 per kilogram in one month.
The government says less sugar is being used for ethanol now than before.
It has limited how much sugar dealers can store.
Bulk buyers will also be allowed to keep only 15 days of supplies.
The government will let 10 lakh tonnes of sugar enter the country without import duty to help lower prices.
The government rejected claims that ethanol production caused the recent sugar price rise.
Sugar prices rose about ₹8 per kg in a month, reaching ₹56 per kg on average.
Sugar diversion for ethanol fell to about 9% in 2025-26 from 12% in 2022-23.
A nationwide 400-tonne stock limit for sugar dealers will remain until November 30.
The Centre allowed duty-free imports of 10 lakh tonnes of sugar until October 31.
- Who
- The Centre, Food and Public Distribution Secretary Sanjeev Chopra, sugar dealers, and bulk consumers.
- What
- The government rejected an ethanol-related explanation for rising sugar prices and introduced stock limits and duty-free imports.
- When
- The measures were announced by August 22, 2026; the import window ends October 31 and dealer stock limits end November 30.
- Where
- Across India.
- Why
- To contain sugar prices and ensure adequate domestic availability.
Those Blaming Ethanol Diversion
Government Position
Cause of higher sugar prices
Those Blaming Ethanol Diversion
Claims have linked the recent sugar price rise to sugar being diverted for ethanol production.
Government Position
The government rejected that link, saying adequate stocks are available and the recent ex-mill increase had no supply-side justification.
- Retail sugar price
- The all-India average reached ₹56 per kg.
- Recent price increase
- Sugar prices rose by around ₹8 per kg over the last month.
- Ethanol diversion
- About 9% of sugar was diverted for ethanol in 2025-26, compared with 12% in 2022-23.
- Sugar dealer stock limit
- Dealers nationwide may hold up to 400 tonnes until November 30.
- Bulk consumer limit
- From September 1, bulk consumers may not hold more than 15 days of consumption.
- Duty-free imports
- The government allowed duty-free imports of 10 lakh tonnes through October 31.
- Ethanol feedstocks
- About one-fourth of domestic ethanol comes from sugar feedstock, with most of the remainder sourced from grains, mainly maize.