Sunita Somvanshi
India’s domestic sugar prices have climbed sharply in recent weeks, driven by a significant production shortfall and a global deficit. The Department of Food and Public Distribution (DFPD) estimates domestic production at approximately 306 lakh metric tonnes (LMT), down from an initial forecast of 343 LMT—a shortfall of 37 LMT.
Retail prices have risen from ₹48.18 per kilogram on July 20 to ₹55.70 per kilogram on August 20, reflecting a 15.6% increase over one month. The global sugar market faces an estimated deficit of 33 LMT, with international prices rising from $474 to $552 per tonne during the same period.
Weather patterns and crop disease are primary drivers. The Press Information Bureau identified Red Rot and Top Borer infestations alongside waterlogging caused by excess rainfall as major factors reducing yield. Ethanol diversion of sugarcane feedstock has declined from 12% (2022–23) to approximately 9% (2025–26), as regulatory adjustments prioritize domestic food consumption over fuel blending.
In response, the DFPD has implemented several market interventions:
- Released an additional 3 lakh tonnes of refined sugar quota to mills for domestic distribution
- Imposed a maximum 400-tonne inventory ceiling for sugar wholesalers and traders with a mandatory 30-day turnover requirement
- Opened a duty-free import window for up to 10 lakh tonnes of raw sugar through October 31, 2026
- Maintained export restrictions through September 30 to prioritize domestic supply
The government notes that adequate stocks remain available domestically, and price firming reflects both lower production and international market dynamics rather than a complete physical shortage.
The new crushing season beginning in October is expected to provide additional supply. Meanwhile, traders and millers are adjusting operations in response to stock limits and the import duty window, which creates a more competitive landscape for both domestic and imported raw sugar.
