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Govt Reveals Real Reason Behind Price Surge (Img: AI generated)
New Delhi: Sugar prices have witnessed a significant increase in the domestic market, with the average retail price reaching Rs 55.70 per kg on August 20, compared to Rs 48.18 per kg a month earlier.
The Centre has rejected claims that the rise in sugar prices is due to diversion of sugarcane towards ethanol production. The Ministry of Consumer Affairs, Food and Public Distribution said multiple factors, including lower production estimates, rising demand and supply concerns, have contributed to the price surge.
According to the government, sugar output is expected to remain below earlier projections due to adverse weather conditions and crop-related issues.
Sugarcane crops in several regions have been affected by diseases such as Red Rot and Top Borer. Excess rainfall and waterlogging have also impacted production, leading to concerns over availability.
The Centre said demand is likely to increase ahead of the festive season, putting additional pressure on prices.
The government clarified that linking the increase in sugar prices with the ethanol blending programme is incorrect.
Officials stated that the share of sugar diverted for ethanol production has declined from around 12 per cent in 2022-23 to nearly 9 per cent in the 2025-26 season.
The ministry also highlighted that a major share of ethanol production now comes from grains, especially maize, rather than sugar-based feedstock.
To prevent hoarding and ensure adequate supply, the government has imposed stock limits on sugar traders. Dealers can now hold a maximum stock of 400 tonnes until November 30.
Bulk consumers have also been restricted from storing sugar beyond 15 days of their consumption requirement from September 1. The Centre has additionally approved duty-free imports of one million tonnes of raw sugar to improve domestic availability.
The government expects sugar production during the current season to be around 30.6 million tonnes, lower than the earlier estimate of nearly 34.3 million tonnes.
Officials said existing sugar stocks are sufficient to meet domestic demand until the start of the next crushing season in October.
The government maintained that ethanol production has supported the sugar industry by helping mills manage surplus production and improve payments to sugarcane farmers.
