New Delhi: Sugar prices in India rose from Rs 48.18 per kg on July 20, 2026 to Rs 55.70 per kg on August 20, 2026, prompting the government to step in with a series of measures to stabilise supply and prices.
The government clarified that the price rise can’t be attributed to sugar diversion for ethanol production. It said the share of sugar diverted for ethanol had actually declined from around 12% in 2022-23 to around 9% in 2025-26, with nearly three-fourths of the country’s ethanol now being produced from grains, particularly maize, according to an official statement.
Officials said the current price increase stems from a combination of factors. These include lower-than-expected domestic production, higher demand ahead of the festive season, weather-related damage to sugarcane crops, tightening global supplies, and speculation and hoarding by some sections of the industry.
Sugar production this season is expected to be around 306 Lakh Metric Tonnes (LMT), compared to an initial estimate of 343 LMT projected by sugarcane-growing states.
The government said production was affected by Red Rot and Top Borer disease in sugarcane, along with waterlogging caused by excess rainfall. It added that despite the shortfall, adequate stocks are available to meet domestic demand until the new crushing season begins in October.
The government noted that the tightening of sugar supplies is a global trend, not limited to India. It said the global sugar deficit for 2026-27 is estimated at around 33 LMT, with unfavourable weather conditions further affecting the outlook.
International sugar prices have risen sharply as a result, climbing from USD 474 per tonne on June 30, 2026 to USD 552 per tonne on August 20, 2026 – an increase of over 16% in less than two months.
Officials highlighted the benefits of India’s ethanol programme for farmers and sugar mills. India typically produces around 320-340 LMT of sugar annually against domestic consumption of 280-290 LMT, they said, and in years of surplus, excess stock has historically blocked mill funds and delayed farmer payments.
The government said diverting excess sugar to ethanol production has addressed this problem and improved the financial health of sugar mills. As of August 20, it said 97% of sugarcane dues for the 2025-26 season had already been paid to farmers.
The improved financial position of sugar mills has also reduced their dependence on government support, officials said. While around Rs 14,600 crore in subsidies was provided to the sugar industry between 2014 and 2021, no such subsidy has been announced since 2021-22.
The government added that consumer sugar prices have remained broadly stable over the longer term, rising by only around 3% annually between August 2024 and July 2026.
The government said it has observed speculation and hoarding by some sugar mills and traders contributing to the recent price rise, and has taken several steps in response.
It has imposed a stock limit of 400 tonnes on sugar dealers across the country from August 1 to November 30, 2026. From September 1, bulk consumers will not be permitted to hold sugar stocks exceeding 15 days of consumption. Joint teams of central and state government officials are conducting physical verification of sugar stocks at mills to check hoarding and artificial scarcity.
As a precautionary measure, the government has decided to permit duty-free import of 10 LMT of raw sugar to further boost domestic availability. States and sugar mills have also been advised to begin crushing from October 15, 2026, a move expected to raise October sugar production from the usual 3-4 LMT to more than 10 LMT, improving availability during the festive season.
The government reiterated its commitment to protecting the interests of both consumers and sugarcane farmers. It said it will continue to closely monitor sugar stocks, prices, and market practices, and take all necessary measures to prevent hoarding and unwarranted price increases while ensuring timely payment of dues to farmers.
