The decline in ex-mill prices is yet to filter down to wholesale and retail markets.
| Photo Credit: The Hindu

The Story So Far: Retail and wholesale prices of sugar witnessed about 40% increase, in some States up to 50%, compared to the same time of last year. In eight States such as Uttarakhand, Punjab, Madhya Pradesh and Odisha, the price for a kilogram of sugar touched more than ₹65. As on August 23, Odisha recorded the highest price, ₹67.4 for a kilogram, which was ₹55 a week ago, ₹50.78 a month ago and ₹46.89 on August 23, 2025.

Even as the Opposition raised the issue last week, the Government was unable to curb the price rise. The Opposition even blamed the diversion of sugarcane for making ethanol as the reason for the sharp increase of the daily essential product. The farmers’ groups argued that the price rise was artificially created by big traders ahead of the festive season. The Government, in its response, said it is monitoring the situation closely and added that a combination of factors, including lower-than-expected domestic production, increased demand ahead of the festive season, weather-related damage to the sugarcane crop, tightening global sugar supplies and speculation and hoarding by some sections of the industry are the reasons for the price hike. The Union Commerce Ministry also issued a notification allowing import of 10 lakh metric tonnes (LMT) of sugar till October 31, 2026.

Current Prices and Variations

The all India average price for a kilogram of sugar was ₹46.3 on August 23, 2025. But as on August 23, 2026, the price increased to ₹62.47, an increase of 34.92%. The increase started within a month as on July 23 of this year, the price was ₹48.62, meaning that the price increased 28.49% in 30 days. Similarly, the wholesale rate for 100 kilograms of sugar on August 23 was ₹,5801.29. A month ago, the rate was ₹4,510.76 and last year, on the same date, it was ₹4,313.32. About 18 States and Union Territories witnessed an increase of 40% to 50% increase in sugar price over the year. In Uttarakhand, where the price on August 23 was ₹67 for a kilogram of sugar, the second highest retail price, it was ₹45 in last year, on the same date. In west Bengal, it was ₹66.17 and ₹47.5, in Rajasthan ₹65 and ₹43.33, in Madhya Pradesh ₹65.38 and ₹44.98 and in Delhi it was ₹65 and ₹45 respectively.

The Opposition’s Allegations and Union Government’s Claims

The Opposition, which has been critical of the Government’s ethanol blending programme in fuels, blamed that the diversion of sugarcane for ethanol production caused the increase in sugar prices. Aam Aadmi Party chief Arvind Kejriwal said diverting sugarcane towards ethanol production has reduced sugar output, pushing sugar prices up by ₹20 per kg in just 17 days. Congress general secretary Jairam Ramesh demanded an immediate review of the E20 policy and sought the provision of non-ethanol petrol for consumers. He said the people are paying the price for both expensive food and expensive travel because of the wrong decisions of the “arrogant Narendra Modi government.”

In a statement issued on August 20, in response to the Opposition’s charges, the Union Consumer Affairs, Food and Public Distribution Ministry said it is closely monitoring the situation and has taken a series of measures to ensure adequate availability of sugar and stable prices for consumers. It maintained that rise in sugar prices could not be attributed to ethanol.

“It is incorrect to attribute the recent increase in sugar prices to diversion of sugar for ethanol production. In fact, the share of sugar diverted for ethanol has declined from around 12% in 2022-23 to around 9% in 2025-26. Moreover, nearly three-fourths of the ethanol produced in the country now comes from grains, particularly maize,” the statement said. The Union Government has also imposed a stock limit of 400 tonnes on sugar dealers across the country from August 1 to November 30 and from September 1, bulk consumers will not be permitted to hold sugar stocks exceeding 15 days of consumption.

Principal scientist at the Indian Institute of Sugarcane Research, an Indian Council of Agricultural Research (ICAR) institution based in Lucknow, Lal Singh Gangwar told The Hindu that an increase of 10% in the retail prices of sugar around the festive season used to be normal. According to him, the input cost for farmers and sugar mills have also gone up in the season because of the increase in diesel and fertilizer prices due to the war in West Asia. “Last year, the government has put a cap that no sugar industry can use sugarcane juice for the production of ethanol,” he added.

Scam, say Farmers Unions

A sugarcane farmer from Maharashtra and leader of All India Kisan Sabha Ajit Nawale said the Union Government’s policies that favoured big retail chains have resulted in such a steep increase in sugar price. He said even according to the Government estimates, the country produces around 320-340 LMT of sugar annually and the domestic consumption is around 280-290 LMT.

“So it is wrong to blame the decrease in production for the increase in prices,” he said adding that the stock of sugar at present is around 38 LMT, which it is less than last year of around 42 LMT. “It is less, but not very less which could create such a sharp increase of 40% in the retail prices. The harvest and crushing of this year is about to begin in September-0October. So whatever is less, could be easily managed,” he said adding that the Union Government failed to control the big retailers who have started hoarding and black marketeering to maximise their profits ahead of the festive season. “This is a scam. They must act on these big traders,” he said.

Published – August 24, 2026 10:38 am IST

Workers harvest sugarcane in Kolhapur district of Maharashtra. File.
| Photo Credit: Reuters

The Indian Sugar and Bio-Energy Manufacturers Association (ISMA) has urged the government to increase the minimum sale price of sugar and ethanol and permit sugar exports.

The Minimum Sale Price (MSP) of sugar should be increased to ₹39.14 a kg for the sugar season 2024-2025 from ₹31 a kg that was fixed in 2019, ethanol procurement prices should be raised to ₹ 73.14 per litre (Sugarcane), ₹67.70 per litre (B-heavy Molasses), ₹ 61.20 per litre (C-heavy molasses) and export of 20 lakh tonnes of sugar should be permitted as there is an excess stock of 31.21 lakh tonnes to 32.21 lakh tonnes, the ISMA said.

M. Prabhakar Rao, president of the Association, said in a statement, “We need urgent support from the government to increase the MSP of sugar to reduce losses being faced by the industry…As such, more than 60% of the sugar is consumed by the beverages, confectionary and other food industries, who are capable of absorbing these prices.”

Present ex-mill sugar prices average ₹36.5 a kg, which falls below the calculated production cost of ₹41.66. Sugar contributes to over 85% of the industry’s revenue and the ex-mill price of sugar must be sufficient to cover cane purchase costs.

According to Deepak Ballani, Director General of ISMA, urgent policy action is imperative for the sugar sector’s stability as production costs are up, ethanol procurement prices are stagnant and the industry expects surplus sugar production.

Establishing a consistent formula for ethanol pricing based on FRP will encourage sugar mills to redirect surplus sugarcane to ethanol production. A long-term export policy will enable effective management of anticipated surpluses, he said.

With an opening stock of 84.21 lakh tonnes and gross production expected to be 333 lakh tonnes, the Association said it estimates the excess stock to be almost 32 lakh tonnes.

Supply trucks loaded with wheat wait for unloading at a port in Kandla, in the western state of Gujarat, India, May 17, 2022. REUTERS/Stringer NO RESALES. NO ARCHIVES.
| Photo Credit: Reuters

The price of wheat has jumped in the international markets after India announced a ban on the export of the staple cereal and due to the reduced production prospects in Ukraine following the Russian invasion, the UN food agency has said.

The Food and Agriculture Organisation (FAO) Price Index averaged 157.4 points in May 2022, down 0.6% from April.

The index, which tracks monthly changes in the international prices of a basket of commonly-traded food commodities, however, remained 22.8% higher than in May 2021.

The FAO Cereal Price Index averaged 173.4 points in May, up 3.7 points (2.2%) from April and as much as 39.7 points (29.7%) above its May 2021 value.

“International wheat prices rose for a fourth consecutive month, up 5.6% in May, to average 56.2% above their value last year and only 11% below the record high reached in March 2008,” it said on Friday.

“The steep increase in wheat prices was in response to an export ban announced by India amidst concerns over crop conditions in several leading exporting countries, as well as reduced production prospects in Ukraine because of the war,” it said.

In contrast, international coarse grain prices declined by 2.1% in May but remained 18.1% above their value a year ago.

Slightly improved crop conditions in the United States of America, seasonal supplies in Argentina and the imminent start of Brazil’s main maize harvest led maize prices to decline by 3.0%, however, they remained 12.9 % above their level of May 2021, it said.

International rice prices increased for the fifth successive month in May.

Quotations strengthened in all the major market segments, but monthly increases were least pronounced (2.6%) for the most widely traded Indica varieties, amid ample supplies, especially in India, it said.

The FAO Sugar Price Index declined by 1.1% from April, as a bumper crop in India buoyed global availability prospects.

The weakening of the Brazilian real against the US dollar, along with lower ethanol prices resulted in further downward pressure on world sugar prices.

“The FAO Sugar Price Index averaged 120.3 points in May, down 1.3 points (1.1%) from April, marking the first decline after sharp increases registered in the previous two months,” the agency said.

“The recent monthly decline in international sugar price quotations was triggered by limited global import demand and good global availability prospects, mostly stemming from a bumper crop in India,” it said.

Last month, India announced that it was banning wheat exports in a bid to check high prices amid concerns of wheat output being hit by the scorching heat wave.

Wheat exports were allowed on the basis of permission granted by the Indian government to other countries to meet their food security needs and based on the request of their governments.

Minister of State for External Affairs V. Muraleedharan had told the Ministerial Meeting on ‘Global Food Security Call to Action’ chaired by the US Secretary of State Antony Blinken under the US Presidency of the UN Security Council for the month of May that India is “committed to ensuring that such adverse impact on food security is effectively mitigated and the vulnerable cushioned against sudden changes in the global market. In order to manage our own overall food security and support the needs of neighbouring and other vulnerable developing countries, we have announced some measures regarding wheat exports on 13 May 2022.

“Let me make it clear that these measures allow for export on the basis of approvals to those countries who are required to meet their food security demands. This will be done on the request from the concerned governments. Such a policy will ensure that we will truly respond to those who are most in need,” he added, emphasising that India will play its due role in advancing global food security.