New Delhi: The Government has stepped up measures to control sugar prices and maintain adequate domestic availability ahead of the festive season, after the average sugar price increased from ₹48.18 per kg on July 20 to ₹55.70 per kg on August 20, 2026.
The Government attributed the increase to multiple factors, including lower-than-expected domestic production, festive-season demand, weather-related crop damage, tighter global supplies, and speculation and hoarding.
Sugar Production Estimated at 306 LMT
Sugar production for the current season is expected to be around 306 lakh metric tonnes (LMT), against an initial estimate of approximately 343 LMT by sugarcane-growing states.
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Production has been affected by:
- Red Rot and Top Borer diseases in sugarcane
- Waterlogging caused by excessive rainfall
- Lower-than-expected crop output
The Government said available sugar stocks are sufficient to meet domestic demand until the next crushing season begins in October.
Centre Rejects Link Between Sugar Price Rise and Ethanol
The Government said the recent rise in sugar prices cannot be attributed to diversion of sugar for ethanol production.
According to the Government:
- Sugar diverted for ethanol declined from around 12% in 2022-23 to 9% in 2025-26.
- Nearly three-fourths of India’s ethanol production now comes from grains, particularly maize.
The Government also said ethanol production has helped sugar mills manage surplus production and improve their financial position.
Global Sugar Prices Also Increase
The Government said the tightening of sugar supplies is also being witnessed globally.
The global sugar deficit for 2026-27 is estimated at around 33 LMT. International sugar prices increased from $474 per tonne on June 30 to $552 per tonne on August 20, representing a rise of more than 16%.
Measures to Check Hoarding and Boost Supply
The Centre has announced several measures to increase availability and prevent artificial scarcity:
- 400-tonne stock limit: Applied to sugar dealers nationwide from August 1 to November 30, 2026.
- 15-day stock limit: From September 1, bulk consumers cannot hold sugar stocks exceeding 15 days of consumption.
- Physical stock verification: Joint Central and State Government teams are checking stocks at sugar mills.
- Duty-free imports: The Government will permit duty-free import of 10 LMT of raw sugar.
- Earlier crushing: States and sugar mills have been advised to begin crushing from October 15.
The Government expects earlier crushing to increase October production from the usual 3–4 LMT to more than 10 LMT, improving availability during the festive season.
97% of 2025-26 Sugarcane Dues Paid
The Government said 97% of sugarcane dues for the 2025-26 season had been paid to farmers as of August 20, 2026.
It also stated that the improved financial position of sugar mills has reduced their dependence on government support. While around ₹14,600 crore in subsidies was provided to the sugar industry between 2014 and 2021, no such subsidy has been announced since 2021-22.
The Government said it will continue monitoring sugar stocks, prices and market practices while taking measures to prevent hoarding and ensure timely payment of sugarcane dues.
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