The government has urged sugar mills to ensure adequate supplies during the coming festive season so that prices remain stable, a Food Ministry official said on Thursday.
“We have asked mills to provide accurate monthly production and sugar sale data, and it is the collective responsibility of the entire sector to ensure that prices remain stable. There is no justification for any price rise during festivals,” Ashwini Srivastava, a joint secretary, department of food and public distribution, said at the India Sugar & Bio-Energy Conference.
The ministry will track sugar production on a monthly basis, he said. Srivastava said the food ministry has received applications to import 0.8 million tonne (MT) of sugar under a duty-free quota of 1 MT so far. India, usually a sugar exporter, will be importing the sweetener from Brazil after nearly a decade.
Sugar prices rose to a record high last month on concerns over supplies, prompting the government to allow duty-free imports of 1 MT of sweetener. Srivastava said sugar prices surged not because of a spurt in demand but because of hoarding in anticipation of further price increases during the festival season.
Production Deficit
The average retail price of sugar stood at Rs 60.2/kg on Thursday, up 39% year-on-year and 19% month-on-month, according to the Department of Consumer Affairs’s price monitoring cell. However, across urban centres, retail prices have crossed Rs 65/kg.
The government attributed the sharp spike in sugar prices to factors including a fall in domestic production due to weather-related damages, a demand spike ahead of the festive season, high global prices and hoarding by some producers.
The sugar industry stated that the recent price spike resulted from speculative buying by traders and bulk consumers, as well as lower-than-estimated production, while maintaining there is no sweetener shortage.
Sugar prices rose by 16% to Rs 55.70/kg on August 20, 2026, from R 48.18/kg just a month prior, which, according to a government note reflected short-term supply and market factors rather than a shift in the underlying price trend.
Sugar production declined by 27% to around 28.1 million tonne (MT) in the 2025-26 season from 35.8 MT in 2021-22. Consumption increased marginally according to industry estimates to 28.7 MT from 27.3 MT in the last five seasons.
The prospects for the opening sugar stock in the 2026-27 season (October-September) have dipped to only 3.5 MT, the lowest in the last decade also leading to a rise in prices.
Transition to Fortnightly
Aimed at improving market supply, the food ministry announced a fortnightly sugar allocation system from September, replacing the existing monthly quota mechanism. Under the new system, mills must sell at least 40% of their allocation in the first week and the balance in the following week.