Sugar cane farm
New Delhi: The Centre on Friday, August 21, dismissed claims that sugar diversion for ethanol was behind the sweetener’s sharp price rise, instead accusing mills of hiking rates despite adequate stock to meet domestic demand. States have been told to act against hoarding and black marketing, and to prepare for an early start to crushing by around October 15.
Briefing the media, Food Secretary Sanjeev Chopra said the government has allowed duty-free imports of 10 lakh tonnes of sugar by October 31 and imposed stock-holding limits on dealers and bulk consumers such as soft-drink and ice-cream makers. He said sugar stocks remain ample despite production falling to 306 lakh tonnes for 2025-26, down from an earlier estimate of 343 lakh tonnes, due to pest disease and waterlogging from excess rains. Annual domestic demand stands at 280-285 lakh tonnes.
The all-India average retail price has risen to Rs 56 per kg from Rs 48 per kg on July 20. Ex-mill prices, Chopra said, have jumped from Rs 47-48 per kg to Rs 62 per kg in just 7-10 days, calling the spike “unjustified.”
Chopra met representatives of ISMA and the National Federation of Cooperative Sugar Factories (NFSCF) on Friday and told them the sudden hike was “not acceptable.”
“We have always been assisting the sugar sector, and we expect that they will not take advantage of these situations to the detriment of the consumers of the country,” Chopra said.
Chopra rejected the link between ethanol diversion and the price surge as “completely baseless,” saying the shift to ethanol has strengthened the sugar sector financially and ensured timely payments to farmers.
In 2022-23, nearly 43 lakh tonnes of sugar — 12 per cent of total stock — was diverted to ethanol. This season, only 28 lakh tonnes have been diverted so far, with just a quarter of ethanol now coming from sugar and the rest from grains, mainly maize.
“There has been this sharp increase in the prices of sugar in the recent past, and they have gone up from Rs 48 just about 15 days back to a level of Rs 56 now. It is important to clarify that this is not based on any fundamentals,” Chopra said.
India is projected to close September 2026 with 33-35 lakh tonnes in stock. With crushing starting early on October 15, Chopra said an additional 10-12 lakh tonnes should be available in October, more than enough for domestic needs.
However, as a “precaution” the government has cleared duty-free import of 10 lakh tonnes of raw sugar, and refineries holding imported raw sugar under the advance authorisation scheme have been allowed to sell it domestically, adding another 3-4 lakh tonnes to supply.
Chopra also flagged mills selling stock only on paper to create “artificial scarcity,” and has directed that sold quantities actually reach retail markets. States have been asked to act against black marketers, hoarders and speculators, and to be ready for the early crushing start.
The government is also considering tightening the current 400-tonne stock-holding limit for dealers. From September 1, bulk consumers will be barred from holding stock beyond 15 days of consumption — a move Chopra acknowledged “could be a little inconvenient” but necessary given unnecessary hoarding.
Chopra assured there would be no supply issues through the festive season and beyond, and said the government remains committed to protecting both farmers’ and consumers’ interests.
This post was last modified on August 22, 2026 7:58 am