Sweet Festival, Bitter Reality: India’s Sugar Prices Soar Ahead of Celebrations (Img: Dynamite News)
New Delhi: India’s sugar market has taken an unexpected turn. At the start of the 2025-26 sugar season, the country was preparing for a surplus and even permitted exports. Months later, lower production, rising festive demand and falling stocks have pushed prices sharply higher.
The Indian Sugar and Bio-energy Manufacturers Association (ISMA) initially estimated gross sugar production at 34.9 million tonnes (MT), up from 29.6 MT in the previous season. Based on those projections, the government allowed 1.5 MT of exports in November 2025, followed by another 500,000 tonnes in February.
But production estimates steadily weakened.
ISMA revised its forecast to 32.4 MT in February and 32 MT in April. The government’s latest estimate stands at 30.6 MT. After ethanol diversion and exports, the quantity available for domestic consumption is estimated at about 26.9 MT, below annual consumption of around 28.5 MT.
Weather and crop-related problems, including red rot, top borer disease and waterlogging in Maharashtra, have further hurt production.
The tightening supply has triggered a steep rise in sugar prices. Ex-mill prices reached a record ₹5,350 per 100 kg on August 18, before touching ₹5,850 in Uttar Pradesh a day later.
The government responded by tightening stockholding limits and opening imports of 1 MT of sugar after scrapping the 100% import tariff.
India’s carry-over stocks could fall to around 3.2 MT, among the lowest levels in nearly two decades. Industry estimates also put 2026-27 sugar production at around 29 MT.
With festive demand rising and weather risks looming, the government faces the difficult task of keeping prices under control while ensuring adequate supplies for consumers and protecting sugarcane farmers.
