Rising sugar prices in India have brought renewed focus on shortcomings in the country’s sugar policy, with inaccurate production estimates and export permissions emerging as key factors behind the current supply pressure.

Sugar prices began coming under pressure from October 2025. Despite concerns over lower sugarcane production and the impact of El Niño, the government reportedly underestimated the risks and permitted sugar exports.

In November 2025, permission was granted to export 1.5 million tonnes of sugar, followed by another 0.5 million tonnes later. By February 2026, signs of lower production had emerged, while sugar mills were reportedly struggling to meet their monthly sales quotas. Despite this, another 0.5 million tonnes of exports were permitted.

Before export restrictions were introduced, around 0.8 million tonnes of sugar had already left the country, further tightening domestic availability.

For 2025-26, India had an estimated surplus stock of 4.7 million tonnes, while sugar production for the year was projected at 27.9 million tonnes. With domestic consumption estimated at around 28 million tonnes for 2026-27, the overall stock initially appeared adequate. However, the export of around two million tonnes added pressure to the supply situation.

The government is now preparing to import one million tonnes of sugar duty-free by October 31. The move would mark India’s first sugar imports since 2016-17.

Meanwhile, the Centre has announced stock limits from September 1 to November 30. Large buyers consuming more than 10 tonnes of sugar per month will be allowed to hold only 15 days’ stock, aimed at preventing hoarding and black marketing.

The government is also considering reducing sugarcane diversion for ethanol and increasing the use of maize and rice for ethanol production.

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With the festive season approaching, rising sugar prices are raising concerns that sweets could become more expensive for consumers. Increasing demand, lower production and concerns over stocks have pushed sugar prices higher in the domestic market.

According to recent market data, sugar prices have increased by around 8% on average over the past month, while prices in some states have risen by nearly 15%. Wholesale prices have also increased by up to ₹400 per quintal.

Sugar Mills Plan Early Crushing

To increase supplies and ease price pressure, sugar mills are reportedly planning to begin the crushing season 10 to 15 days earlier than usual this year. The move is aimed at bringing fresh sugar into the market sooner, particularly ahead of major festivals such as Dussehra and Diwali.

Why Are Sugar Prices Rising?

Lower-than-expected production is one of the key reasons behind the price rise. Initial estimates had projected sugar production at around 29.3 million tonnes, but actual production is estimated at approximately 28 million tonnes, nearly 5% below the projection.

The country, however, has around 5 million tonnes of carryover stock from the previous year. With annual domestic consumption also estimated at around 28 million tonnes and nearly 800,000 tonnes already exported, concerns over future availability have added to market pressure.

Fears of lower production next year have further contributed to the price rise.

Retail Prices Climb Across Major Cities

Retail sugar prices have increased in several major cities. In Delhi, prices have risen from ₹45 to ₹49 per kg. In West Bengal, prices have climbed from ₹49 to ₹55 per kg. Chennai has seen an increase from ₹46 to ₹53, while Mumbai prices have risen from ₹46 to ₹52. In Ranchi, prices have increased from ₹47 to ₹51 per kg.

The price rise could benefit sugar producers but may put additional pressure on household budgets during the festive season.

Higher sugar prices could also affect the government’s ethanol blending programme, as mills may find direct sugar sales more profitable than diverting sugarcane juice for ethanol production. The government has been monitoring stocks and imposing measures to control prices, but the impact on retail markets remains limited so far.

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