5 days ago
India’s Sugar Prices Surge as Demand, Weather and Speculation Weigh
Sugar has become much more expensive in India.
People and businesses are buying extra sugar before the festive season, which is pushing prices up.
Some sugarcane crops were also damaged by diseases, heavy rain and waterlogging.
This means less sugar is being produced than originally expected.
Some groups blame the ethanol programme because sugar was used to make fuel.
The sugar industry says that sugar came from a surplus and did not reduce the amount needed by Indian consumers.
It also says traders and large buyers may have bought too much sugar too early.
The government is trying to help by allowing imports, limiting how much some buyers can store and restricting exports.
Indian sugar prices have reportedly risen nearly 40% in two months, reaching ₹65 per kg in some retail markets.
Lower production caused by crop diseases, excessive rainfall and waterlogging has reduced output estimates to about 30.6–30.9 million tonnes.
Festive-season demand, advance buying, speculation and possible hoarding have tightened supplies in the open market.
ISMA says about 30 lakh tonnes were diverted to ethanol from an estimated 309 lakh tonnes, leaving roughly 279 lakh tonnes for domestic needs.
The Centre has permitted up to 10 lakh tonnes of raw-sugar imports, imposed stock limits and restricted exports to ease price pressure.
- Who
- Indian consumers, the government, sugarcane farmers’ groups, the Opposition and the Indian Sugar and Bio-energy Manufacturers Association, represented by director general Deepak Ballani.
- What
- Indian sugar prices have risen sharply amid lower production, stronger seasonal demand, speculation, disputed concerns about ethanol diversion and tighter international supplies.
- Where
- India, with crop impacts discussed in Maharashtra and Uttar Pradesh and international market conditions linked to Brazil.
- When
- The increase was reported over the two months preceding 20 August, during the 2025–2026 sugar season and ahead of the festive season; the government’s raw-sugar import window runs until 31 October.
- Why
- The government cited lower output, festive demand, weather damage, tighter global supplies, speculation and hoarding; the Opposition also blamed sugar diversion for ethanol production.
Ethanol Critics and Market Concerned Groups
Government and Sugar Industry
Role of ethanol diversion
Ethanol Critics and Market Concerned Groups
The Opposition argues that diverting sugarcane or sugar toward ethanol reduces supplies available for consumers and has contributed to higher prices. A Crisil Intelligence note said sugar diverted to ethanol rose from 0.8 million tonnes in 2019–2020 to more than 3 million tonnes in 2025–2026.
Government and Sugar Industry
ISMA says ethanol diversion is made only from surplus sugar after domestic demand and reserves are accounted for. It says roughly 30 lakh tonnes diverted this season did not reduce sugar available for domestic consumption.
Main cause of the price increase
Ethanol Critics and Market Concerned Groups
Farmers’ groups allege that large traders artificially pushed prices higher before the festive season, while the Opposition emphasizes ethanol diversion and the resulting reduction in available sugar.
Government and Sugar Industry
The government and ISMA attribute the increase mainly to lower production, festive demand, speculative buying, inventory buildup, hoarding and stronger international prices rather than a structural shortage.
Whether ethanol blending should continue
Ethanol Critics and Market Concerned Groups
The Opposition has continued criticizing the government’s ethanol-blending programme and has questioned it amid rising sugar prices.
Government and Sugar Industry
ISMA says the Ethanol Blended with Petrol programme should not be halted or reconsidered, arguing that it supports sugar mills, timely farmer payments, rural incomes, energy security and emissions goals.
Key facts
- Reported retail price
- ₹65 per kg on Thursday in some markets.
- Reported price increase
- Nearly 40% over two months.
- Current production estimate
- About 30.6–30.9 million tonnes, compared with an initial estimate of approximately 34.3 million tonnes.
- Sugar diverted to ethanol
- Approximately 30 lakh tonnes in the 2025–2026 season.
- Estimated domestic availability
- Around 279 lakh tonnes after ethanol diversion, according to ISMA.
- Annual domestic consumption
- Approximately 280–285 lakh tonnes.
- Government measures
- Up to 10 lakh tonnes of raw-sugar imports, stock limits for dealers and bulk buyers, and restrictions on exports.
Sources
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