Archive · 22 Sep 2026
Sugar Prices Ease, But Retail Relief Lags Supply Chain
Sugar became much more expensive last month, but prices are now starting to fall.
Sugar sold by mills has become cheaper faster than sugar sold in shops.
This means shoppers have not yet received the full benefit of the lower mill prices.
The industry says the price jump lasted only a short time.
It says traders and large buyers bought extra sugar, but that there was no shortage.
The government says weather damage, festival demand, global prices and hoarding also pushed prices higher.
India produced less sugar this season than several years ago.
The government has allowed duty-free imports and taken steps to limit hoarding while prices continue to soften.
Ex-mill sugar prices fell 30% in a month to Rs 4,450 per quintal, while retail prices declined 11-12% to about Rs 57.5 per kg.
The Department of Consumer Affairs recorded an average retail price of Rs 58.02 per kg on Tuesday, 25% higher than a year earlier.
The sugar industry said the recent price surge was temporary and driven largely by speculative buying, rather than a shortage.
The government cited weather-related production losses, festive demand, high global prices and hoarding as factors behind the spike.
India’s sugar output fell to about 28.1 MT in 2025-26, while opening stocks for 2026-27 are expected to be only 3.5 MT.
- Who
- Indian sugar mills, the Indian Sugar and Bio-energy Manufacturers Association, the National Federation of Cooperative Sugar Factories, the Indian government and consumers.
- What
- Sugar prices are declining after a sharp rise, but retail prices are falling more slowly than ex-mill prices.
- When
- The decline followed a price spike in August; figures cited include August 17-31, 2026, and the 2025-26 production season.
- Where
- Across India.
- Why
- Lower production and limited expected opening stocks, along with festive demand, global prices, hoarding and speculative buying, contributed to the earlier price increase.
Sugar Industry View
Government View
Cause of the price spike
Sugar Industry View
The sugar industry attributed the increase mainly to speculative buying by traders and bulk consumers, as well as lower-than-estimated production, while saying there was no sweetener shortage.
Government View
The government attributed the increase to weather-related damage to domestic production, festive-season demand, high global prices and hoarding by some producers.
Extent of mill gains
Sugar Industry View
The industry said mills did not reap windfall gains because the surge was temporary and limited; it cited sales of only about 0.72 MT during August 17-31, 2026.
Government View
The government’s data showed that retail prices had fallen about 10% from their peak, while ex-mill prices had fallen nearly 25%, suggesting that lower costs had not fully reached consumers.
- Ex-mill price
- Rs 4,450 per quintal, down 30% over the past month.
- Retail price
- About Rs 57.5 per kg, according to industry groups; the official average was Rs 58.02 per kg on Tuesday.
- Year-on-year retail change
- The official average retail price was 25% higher than a year earlier.
- Recent sales window
- Mills sold about 0.72 MT at an average ex-mill price of Rs 4,996.98 per quintal between August 17 and August 31, 2026.
- Sugar production
- Output declined 27% to about 28.1 MT in 2025-26 from 35.8 MT in 2021-22.
- Consumption
- Consumption rose marginally to 28.7 MT from 27.3 MT over the past five seasons.
- Government response
- The government allowed duty-free imports of 1 MT of raw sugar and began measures targeting hoarding and bulk inventories.