The recent increase in sugar prices in retail and wholesale markets has directly impacted the monthly expenditure of common consumers, leading to higher prices for items like sweets and tea. In light of this rising inflation, the government has become active.
The government claims that there is no shortage of sugar in the country, as sufficient stock is available to meet domestic needs according to the Indian Sugar Manufacturers Association (ISMA) and government data. However, factors such as festive demand, production shortfalls, seasonal effects, surge in international prices, and hoarding at certain levels are responsible for the recent price hike. ISMA believes that this rise in sugar prices is temporary and that prices are likely to fall in the coming time.
To control prices, the government has permitted the import of 10 lakh tonnes of duty-free raw sugar and has set strict stock limits to prevent hoarding. The start of the new crushing season and the arrival of new stock in the market are expected to stabilize sugar prices, preventing an additional financial burden on the general public.
In this context, ISMA has provided 20 important updates regarding sugar news. These indicate that India has adequate sugar reserves and no structural deficit. Net sugar production for the 2025–26 season is estimated to be around 279 lakh metric tonnes (LMT), while the country's annual domestic consumption is estimated to be between 280 and 285 LMT. The closing stock at the end of the season is estimated to be around 35 LMT, which will ensure uninterrupted domestic supply.
Reasons for the price increase include lower-than-expected production, festive demand, market sentiment, and strength in international prices. As a precautionary measure, the government has granted exemption for the import of 10 lakh metric tonnes of duty-free raw sugar and has implemented strict rules related to stockholding limits, physical stock verification, and weekly disclosures concerning GST checks. The current stock limit for dealers is 400 tonnes, which ISMA has suggested reducing to 200 tonnes.
Artificial scarcity of sugar in the market is being caused by hoarding and forward stocking by some traders. ISMA and other concerned parties are working to start the 2026–27 crushing season 10 to 15 days earlier. Furthermore, special crushing work has already begun in Tamil Nadu and Karnataka. A significant increase in sugar production is expected in October 2026, potentially reaching around 10 lakh metric tonnes compared to the normal 4 lakh metric tonnes.
Continuous availability of sugar in the open market will be maintained through existing stocks and a well-planned monthly release quota system. According to ISMA, the Ethanol Blending Program (EBP) is not responsible for the current increase in sugar prices. In the 2025–26 season, the total ethanol supply will consist of 75% grain-based and only 25% sugar-based ethanol. The total ethanol supply is estimated to be around 1,197 crore liters, with the blending rate reaching up to 20%.
The ethanol program has improved the financial position of mills, and approximately 97% of the sugarcane dues for the 2025–26 season have been paid by August 20, 2026. International sugar prices have seen a massive jump; they rose from $474 per tonne on June 30 to $552 per tonne on August 20, 2026, an increase of over 16%. According to ISMA, the current situation is much better than in 2016–17, when production was only 203 LMT against a demand of 245–250 LMT. In conclusion, the recent price increase is merely a temporary phenomenon and is not related to any fundamental shortage.
