Top News

Sugar prices have risen sharply over the past month. The price of sugar, which stood at ₹48.18 per kg on July 20, 2026, climbed to ₹55.70 per kg by August 20—marking an increase of approximately 15.6%. Amid this price surge, the government has clearly stated that the production of ethanol from sugarcane is not the reason for the rise in sugar prices.

**Government's categorical statement on ethanol**
According to the Ministry of Consumer Affairs, Food and Public Distribution:

"It is incorrect to attribute the recent price hike to the diversion of sugar for ethanol production. Government data shows that the share of sugar diverted for ethanol was around 12% in 2022-23, a figure that has dropped to approximately 9% in 2025-26."

Furthermore, about three-quarters of the ethanol produced in the country now comes from grains, particularly maize. Consequently, the government maintains that ethanol is not the cause of the current inflation in sugar prices.

**Then why are sugar prices rising?**
The government has cited several reasons for the surge in prices:

- Domestic sugar production falling short of estimates.
- Increased demand ahead of the festive season.
- Damage to the sugarcane crop due to heavy rainfall and weather conditions.
- Diseases such as Red Rot and Top Borer.
- Tightening global sugar supplies.
- Hoarding and speculation by certain mills and traders.

Sugar production for the current season is estimated at around 306 lakh tonnes (LMT), whereas sugarcane-producing states had initially projected an output of approximately 343 LMT. Despite this, the government asserts that there are sufficient stocks available to meet domestic demand until the new crushing season begins in October.

**Sugar prices rise in the global market**
High sugar prices are not an issue unique to India. The global sugar deficit for 2026-27 is projected to be around 33 lakh metric tonnes (LMT). Weather-related concerns have also impacted the supply outlook.

International sugar prices rose from $474 per tonne on June 30 to $552 per tonne on August 20—a surge of over 16% in less than two months.

**Major Government Action**
The government has taken several measures to curb hoarding and address supply shortages, such as:

- A stock limit of 400 tonnes has been imposed on sugar dealers from August 1 to November 30, 2026.
- From September 1, bulk buyers will not be permitted to hold sugar stocks exceeding 15 days' worth of consumption.
- Central and state teams are conducting physical inspections of sugar stocks at mills.
- Duty-free import of 10 LMT of raw sugar has been permitted to boost domestic supply.
- Mills have been advised to commence crushing operations from October 15, 2026; this could increase October's production to over 10 LMT, up from the usual 3–4 LMT.

**Benefits of Ethanol for Mills and Farmers?**
The government argues that the ethanol program has strengthened the financial position of sugar mills. India typically produces 320–340 LMT of sugar, while domestic consumption stands at approximately 280–290 LMT. In years of high production, surplus stocks used to tie up the mills' capital, leading to delays in sugarcane payments to farmers.

According to the government:

By August 20, 2026, 97% of the sugarcane dues for the 2025-26 season had been paid to farmers. Meanwhile, the sugar industry received subsidies amounting to approximately ₹14,600 crore between 2014 and 2021, but no such subsidy has been announced since 2021-22.

The government states that it is monitoring sugar stocks, prices, and market activities, and will continue to take necessary measures to curb hoarding and unjustified price hikes.

Disclaimer: This content has been sourced and edited from Dainik Jagran. While we have made modifications for clarity and presentation, the original content belongs to its respective authors and website. We do not claim ownership of the content.