NEW DELHI: Sugar prices in the country are rapidly increasing due to speculation about its record-low stocks and the approaching festive season. Retail prices have risen by approximately 20% since August 7 across major cities.
The retail price of sugar has increased from Rs 52 to around Rs 62 over the past 12 days, representing a rise of 19-21%. Market analysts predict that the prices will continue to rise in the coming days, raising concerns for the government regarding domestic sugar supplies and pricing.
Lower production, combined with the allowance of sugar exports and the diversion of sugarcane-based feedstock toward ethanol production, are major factors contributing to price rise.
However, the government had recently assured sufficient quantities of sugar availability and issued an order to impose stockholding limits on sugar dealers nationwide till November 30, 2026.
The year-end sugar stock for this sugar season (October 2025 - September 2026) is projected to be a record low. The stock on September 30 is expected to be around 32 lakh metric tonnes (LMT), significantly below the normal required stock of 60 LMT. This would mark the lowest closing stock since 2010. In comparison, last season’s sugar availability at the end of the year was 47 LMT.
Meanwhile, per month consumption of sugar required in the country is around 24 LMT. For the current sugar season, the industry had projected a total production of 342 LMT. Based on this projection, the government allowed sugar exports for the current season, permitting a total of 20 LMT of sugar to be exported in two phases. However, actual production has fallen short, registering only 308 LMT.
Out of this, 28 LMT was diverted for ethanol production, leaving 280 LMT for domestic consumption. Upon realising the lower production figures, the government imposed a ban on sugar exports in May, by which time 8 LMT had already been exported.
“There is significant speculation in the market regarding the quantity of sugar available at the end of the sugar season among traders and the industry. Nobody knows the exact amount of sugar available, which is fuelling rising prices,” said a market expert.
They further noted that the industry body misled the government about projected higher production, which led to the allowance of exports and diversion for ethanol.