India sugar price surge and government response

Sugar prices in India have surged sharply ahead of the festive season, with retail prices rising from Rs 48.18 per kg on July 20 to Rs 55.70 per kg on August 20, and even higher in some markets like India — Kolkata where prices reached Rs 70 per kg. The government attributes the rise to lower domestic production (estimated at 306 LMT versus initial projections of 343 LMT), crop damage from Red Rot and Top Borer diseases, waterlogging, increased festive demand, tightening global supplies, and hoarding by some mills and traders. The government has rejected claims that diversion of sugar to ethanol production is a major cause, noting that the share of sugar diverted for ethanol has fallen to about 9% in 2025-26 from 12% in 2022-23, with grains now accounting for three-fourths of ethanol output. In response, the government has imposed stockholding limits on dealers (400 tonnes) and bulk consumers (15 days' consumption), allowed duty-free imports of 1 million tonnes of raw sugar, ordered physical verification of mill stocks, and advised early crushing from October 15 to boost supplies. Political opposition, led by Mallikarjun Kharge, has criticized the government's handling of the situation, questioning low stocks, price increases, and the ethanol policy. Global sugar prices have also risen due to expected deficits, with international prices up over 16% since June.