A recent climb in sugar prices has drawn close Government attention, with fresh measures now in place to protect consumers and keep supplies steady during the festive season. According to a press note issued by the PIB Delhi State Unit, sugar prices moved from ₹48.18 per kg on 20 July 2026 to ₹55.70 per kg on 20 August 2026.
The Government has said it is actively tracking prices, stocks and market behaviour, while taking steps to ensure that sugar remains available in adequate quantity.
## Ethanol Not Behind the Price Increase
The recent sugar price rise has not been linked to ethanol production, the press note clarified. The share of sugar used for ethanol has actually fallen from about 12% in 2022-23 to around 9% in 2025-26.
The note also stated that nearly three-fourths of ethanol produced in the country now comes from grains, especially maize.
Instead, the increase has been connected to several factors, including lower domestic output than earlier expected, stronger festive season demand, crop damage caused by weather, tighter global sugar supplies, and speculation and hoarding by some parts of the industry.
## Sugar Output Below Earlier Expectations
Sugar production for the current season is now expected to be around 306 LMT, against the earlier estimate of about 343 LMT by sugarcane-growing States.
The decline has been linked to Red Rot and Top Borer disease in sugarcane, along with waterlogging caused by excess rainfall.
Even with the lower estimate, the Government has said the country has enough sugar stock to meet domestic needs until the next crushing season starts in October.
## Global Sugar Market Also Under Pressure
The price movement is not limited to India. Global sugar supplies have also tightened, with the sugar deficit for 2026-27 estimated at around 33 LMT.
Weather concerns have added further pressure to the international outlook. Global sugar prices rose from $474 per tonne on 30 June 2026 to $552 per tonne on 20 August 2026, marking an increase of more than 16% in under two months.
## Ethanol Programme Supports Mills and Farmers
India usually produces around 320-340 LMT of sugar each year, while domestic consumption is about 280-290 LMT. In surplus years, excess stocks can block funds at sugar mills and slow payments to sugarcane farmers.
The diversion of surplus sugar toward ethanol has helped reduce this pressure and improve the financial position of sugar mills.
The press note said 97% of sugarcane dues for the 2025-26 sugar season had been paid to farmers as of 20 August 2026.
It also pointed to a reduced need for Government subsidy. While the sugar industry received around ₹14,600 crore in subsidy between 2014 and 2021, no such subsidy has been announced since 2021-22.
For consumers, sugar prices have remained broadly steady over the longer term, rising by only around 3% annually between August 2024 and July 2026.
## Action Against Hoarding and Artificial Scarcity
The Government has observed that speculation and hoarding by some sugar mills and traders have contributed to the recent rise. Several steps have been announced to improve availability and check market manipulation.
A stock limit of 400 tonnes has been placed on sugar dealers nationwide from 1 August to 30 November 2026. From 1 September, bulk consumers will not be allowed to hold sugar stock beyond 15 days of consumption.
Central and State Government teams are also conducting physical checks of sugar stocks at mills to detect hoarding and prevent artificial scarcity.
To further increase supply, the Government has decided to allow duty-free import of 10 LMT of raw sugar as a precautionary measure.
States and sugar mills have also been advised to begin crushing from 15 October 2026. This is expected to lift October sugar production from the usual 3-4 LMT to more than 10 LMT, strengthening availability during the festive season.
The Government has said it remains focused on safeguarding both consumers and sugarcane farmers. It will continue monitoring prices, stocks and market practices, while taking necessary action to prevent hoarding, avoid unwarranted price increases and ensure timely payment of farmer dues.
