1 week ago
Sugar Shortage Fears and Hoarding Pressure India’s Markets
Sugar has become harder to obtain in some markets, and shoppers are worried prices will rise.
Some traders are accused of holding back sugar and jaggery before festivals.
Bad weather, heavy rain, plant diseases and pests have damaged sugarcane crops.
Because of this, India may produce less sugar than originally expected.
The government says the expected shortage is about 37 lakh tonnes.
It has stopped sugar exports and allowed some raw sugar to be imported.
Some people blame the country’s ethanol policy for reducing sugar supplies.
Analysts say most ethanol now comes from maize and broken rice, so ethanol may not be the main cause.
Better crop protection and stronger action against hoarding could help ease the pressure.
Sugar is selling at about Rs 60 per kilogram in Anantapur, while jaggery costs Rs 60-80 depending on quality.
Retailers fear sugar prices could reach Rs 80 per kilogram or higher before the festival season.
Production is reportedly expected to fall from 343 lakh tonnes to about 306 lakh tonnes, creating a 37-lakh-tonne shortfall.
Weather damage, waterlogging, red rot and top borer attacks have reduced sugarcane yields in major producing states.
The government banned sugar exports until September 30 and allowed 10 lakh tonnes of raw sugar imports without import duty.
- Who
- Consumers, retailers, traders, sugarcane producers, industry observers and the central government are involved.
- What
- Artificial scarcity allegations and lower sugar production are contributing to fears of shortages and higher prices.
- Where
- The reported market concerns are centered in Anantapur, while crop losses were reported in Maharashtra and Uttar Pradesh.
- When
- The pressure is occurring during the current sugar season, ahead of the festival season and Shravan; export restrictions run through September 30, 2026.
- Why
- Adverse weather, pests, diseases, reduced production and alleged trader stockpiling have strained supplies.
Ethanol Policy Critics
Industry Analysts and Policy Supporters
Cause of sugar pressure
Ethanol Policy Critics
Critics argue that diverting sugarcane toward ethanol production could reduce the amount of sugar available domestically.
Industry Analysts and Policy Supporters
Analysts say sugarcane-based ethanol is mainly made from molasses left after sugar extraction, while nearly 85 per cent of ethanol comes from grain feedstocks such as maize and broken rice; therefore, ethanol may not be the primary cause of the current pressure.
Immediate market problem
Ethanol Policy Critics
Retailers and consumers point to the difficulty of obtaining sugar and fear that prices could rise to Rs 80 per kilogram or more.
Industry Analysts and Policy Supporters
Industry observers emphasize alleged stockpiling and artificial scarcity by some traders as factors aggravating market pressure, alongside the production shortfall.
Long-term response
Ethanol Policy Critics
Concerns about ethanol diversion imply that energy policy should be assessed against its possible effect on sugar availability.
Industry Analysts and Policy Supporters
Experts recommend addressing weather-related crop losses, improving market surveillance against hoarding and promoting climate-resilient sugarcane varieties.
Key facts
- Current sugar price
- About Rs 60 per kilogram
- Jaggery price
- Rs 60-80 per kilogram, depending on quality
- Expected sugar production
- About 306 lakh tonnes, compared with an initial estimate of 343 lakh tonnes
- Reported shortfall
- Nearly 37 lakh tonnes
- Export policy
- Sugar exports were banned from May 13, 2026, with the restriction extended until September 30
- Import measure
- The government permitted 10 lakh tonnes of raw sugar imports and removed the 100 per cent import duty on that quantity
- Ethanol supply mix
- Grain-based ethanol accounts for nearly 85 per cent of domestic ethanol supplies in the 2025-26 ethanol supply year
Quotes
Ramana
A shopkeeper from Anantapur
“We couldn’t get sugar as the wholesale traders are refusing to supply it at affordable prices and there’s no sugar stock at our shop”
deccanchronicle.com
Sources
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