I
n kitchens across India, one can feel the difference when going to their regular kirana shop for buying sugar packets that cost much more than a month ago.
Official figures indicate that the current price level of the all-India average retail price index stands at ₹63.05 per kg on August 24, an increase of about 29 percent from ₹48.73 per kg of last month, while prices in cities like Mumbai have increased from ₹50 to ₹70 per kg in one week only.
The figures give away the fact that it is not an upward trend that is developing here but an accelerated one. The retail sugar prices have risen from ₹48.18 per kg on July 20 to ₹55.70 per kg by August 20, according to the Ministry of Consumer Affairs, Food and Public Distribution, rising to ₹63.05 per kg just four days after that.
The maximum retail price on August 24 has gone up to ₹75 per kg in some markets, with the "modal" or average price being closer to the all-India average. Prices rose by about 13 per cent year-on-year in mid-August before the further increase in the following few days.
The average prices in wholesale mandis monitored by Agmarknet have been hovering around ₹4,542 and ₹5,650 per quintal in different states, the maximum being registered in Assam and the minimum in Uttar Pradesh.
As per Union Food and Consumer Affairs Minister Pralhad Joshi, there are two reasons why India faces this production problem resulting in price pressure—namely, red rot disease in sugarcane and disruption of agricultural activities caused by El Nino in India as well as in other countries manufacturing sugar.
Joshi says that India's annual sugar requirement is 280 lakh tonnes, while the surplus that India has right now is about 20-25 lakh tonnes, which he says is sufficient, although he acknowledges that there is "a concern" with regard to the upcoming festive seasons.
However, some people in the industry have raised yet another concern with respect to the sharp rise in prices. As per Deepak Ballani, Director General of the Indian Sugar Mills Association (ISMA), the rise in prices in the last fortnight is only speculative and is not based on any shortage in the physical stock. Niraj Shirgaokar, President of ISMA, believes that there will be a closing stock of 35 lakh tonnes of sugar in the current season, which is adequate to meet domestic demand.
Faced with the most rapid sugar price movement in almost a decade, the government has taken action on several fronts. First, it has announced the duty-free import of up to 10 lakh tonnes (1 million tonnes) of sugar until October 31, 2026.
It is the first time in about ten years when such a major import arrangement has been announced. According to the early estimates made by Greenleaf, a research firm in the industry, the actual imports may come in at about half of the authorized quota, considering that the raw sugar imports require refining.
Apart from that, the government has announced the Sugar (Stockholding Limit of Bulk Consumers) Order, 2026. According to it, all confectioners, soft drink manufacturers, food processing units, and sweetmeat shops consuming more than 10 tonnes of sugar a month cannot keep stock beyond their 15-day consumption.
The order comes into effect on September 1 and shall remain applicable until November 30, i.e., covering the festival season of Onam, Rakshabandhan, and Janmashtami. The Centre has ordered sugar mills to provide sales information on a mill-wise and buyer-wise basis for the period of August 17-19.
It is done in order to find out any stockpiling and bulk purchases responsible for the current price movement. In addition, the government has released some domestic quota of sugar in the past festival seasons in order to cater to increased festival demand and is willing to do the same now.
The problems with Indian sugar prices take place amid tightening global sugar prices too. The US sugar futures are trading at more than 17 cents per pound and almost at their peak since May 2025 due to the expectation of lower global supplies.
Brazil, which is the world's biggest producer of sugar, is set to see a reduction of sugar production amid growing sugarcane production because the country's agricultural crop forecasting agency predicts that Brazil will shift cane to ethanol production rather than sugar production.
Safras & Mercado, consulting company, has made an estimation of the decrease of Brazil's 2026/27 sugar production and export compared to the previous season. News about the potential loosening of India's import duty structure boosted raw sugar prices before India announced the creation of duty-free imports in the international market, while the forecast of powerful El Nino in the upcoming season adds more uncertainty to the global supply estimates.
For now, the message from the government and the industry organization is that there is no structural shortage of sugar in India, but rather a temporary imbalance between speculative market activity and real physical stocks.
Whether this message becomes the reality of lower prices at the retail level will depend on how fast the limits of stockholding will stop bulk hoarding, on how much of authorized import quota will actually turn into imported sugar and on how sugar mills will react in view of upcoming crushing season, which, according to ISMA, will start earlier than usual this season. In any case, consumers will keep paying a higher price for sugar during the festival season.
