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A sharp increase in the prices of sugar is being seen across the country. Within just 17 days, the price of sugar has increased by about Rs 19, due to which the kitchen budget of common people is being affected.

New Delhi: The sharp rise in sugar prices in India has raised new concerns about inflation. Sugar prices have increased rapidly in the wholesale market in August and questions are also being raised regarding the supply before the upcoming festive season. Meanwhile, Aam Aadmi Party convenor Arvind Kejriwal targeted the central government over the rising prices of sugar and made sharp remarks linking the ethanol production policy with the current situation of inflation.

Criticizing the government on social media, Kejriwal said that the emphasis on making ethanol from sugarcane had affected the availability of sugar and now there may be a need to buy sugar from abroad to overcome the shortage. He called it a policy failure of the government. However, industry and market experts’ assessment of the relationship between ethanol production and sugar prices involves multiple factors and attributing it to just one factor does not give the complete picture.

Why did sugar prices rise?

Many reasons are being cited behind the current rise in the sugar market like domestic supply, increasing diversion from sugarcane to ethanol production, low opening stocks, festive demand and crop risks. According to recent reports, wholesale sugar prices have reached near record levels in major markets of the country. According to a report, prices at major business centers have increased by about 20 percent in August.

As per the data available from the Department of Consumer Affairs, Government of India, the all India average retail sugar price as on August 17, 2026 was recorded at around Rs 51.68 per kg. On the same day, the all India average wholesale price was around Rs 4,780 per quintal. These figures are average across the country, so the actual price may differ in local mandis and cities.

Retail prices also increased in one year

According to Consumer Affairs data, retail prices of sugar have also seen an increase on an annual basis. Available reports put the average retail price around August 18 at about 13 percent higher than a year ago. This effect of inflation can be seen from the household budget to the costs of companies manufacturing sweets, biscuits, beverages and other food products.

The demand for sugar generally increases during the festive season. This year too, demand is likely to increase ahead of festivals like Ganesh Chaturthi, Dussehra and Diwali, which may put additional pressure on supply and prices.

Why is there debate on ethanol policy?

India has promoted the use of sugarcane and its associated products with the aim of increasing ethanol blending in petrol. One advantage of this is to reduce dependence on energy imports, but in the context of the sugar industry, the question has been arising as to how much of the sugarcane should be used for sugar production and how much for ethanol.

Amidst the current rise in prices, market experts have started discussing policy options to increase the domestic availability of sugar. According to reports, the government is considering measures to duty-free sugar imports in limited quantities and ethanol diversion of sugarcane.

Government also imposed stock limit on wholesale buyers

To control rising prices, the Center has decided to impose new restrictions on sugar storage by bulk consumers. Under the rule, which will be applicable from September 1 to November 30, 2026, big buyers using more than 10 metric tons of sugar in a month will be able to keep stock only for a limited period. The aim of the government is to stop hoarding and maintain supply in the market.

The move will impact institutional buyers such as biscuit and confectionery companies, food processing units, beverage manufacturers and large confectionary traders.