Sugar Crisis: There has been a rise in the prices of sugar in the country for some time and due to this increase, questions are also being raised on ethanol production. But now the Central Government has made it clear that it is not right to blame only ethanol production for the current rise in sugar prices. There are many reasons behind this including low production, adverse weather conditions, increasing demand and lack of supply in the global market.
Read :- Sugar Price Hike: Congress Chief's question to Modi government – When there is shortage of sugar in the country, then why not review the policy of using sugarcane to make E20?
Sugar used in ethanol reduced
According to the government, the share of sugar used in ethanol production has decreased in the last few years. In 2022-23, about 12 percent sugar was used in ethanol production, while in 2025-26 it has come down to about 9 percent. Apart from this, maize is also being used on a large scale for ethanol production. In such a situation, there are many other reasons behind the increase in sugar prices. The government says that in the current season the country is estimated to produce about 306 lakh metric tonnes (LMT) of sugar. At the same time, the initial estimate of sugarcane producing states was around 343 LMT. That means the production is likely to be much less than the initial estimate. This is affecting the prices of sugar in the market.
Impact of rain and crop diseases also
The sugarcane crop has also faced the ravages of weather. Crops were affected in many areas due to excessive rain and waterlogging. Apart from this, diseases like red rot and top borer have also harmed the productivity of sugarcane. At the same time, along with increasing demand for sugar before festivals, lack of supply in the global market is also affecting the prices. The government has also included hoarding and speculation as possible reasons for the rise in prices.
Sugar prices also increased in the international market
The rise in sugar prices is not limited to India alone. According to the government, there is an estimated shortage of about 33 lakh metric tonnes of sugar globally in 2026-27. The price of sugar in the international market was around $ 474 per tonne on June 30, 2026, which increased to $ 552 per tonne by August 20. That means the price increased by more than 16 percent in less than two months.
Government said- sufficient stock in the country
However, the government says there is enough sugar stock available in the country to meet domestic demand till the start of the new crushing season. The government also clarified that it is not right to consider ethanol production as the reason for the sugar crisis. According to the government, using excess sugar in ethanol production helps in reducing the excess stock. This strengthens the financial condition of sugar mills and also improves their ability to make payments to sugarcane farmers. Overall, the government's message is clear—not just ethanol, but many factors like low production, weather, increasing demand and the global market are responsible for the rise in sugar prices.