- Huge increase in sugar prices ahead of festive season in the country
- At present the production of sugar is likely to be in the range of 306 lakh tonnes
- Almost 11 percent less than the state's 343 lakh tonnes at the beginning of the year
- The government gave reasons for the increase in sugar prices
Sugar Price Hike: Sugar prices have reached a record high in the country ahead of the festive season. Meanwhile, the government has said that sugar production for the current season (October-September) is estimated at 30.6 million tonnes. This is a whopping 11% lower than the initial estimate of 34.3 million tonnes. The government has also denied allegations that the use of sugar for ethanol production is affecting availability and driving up prices. The government has said that less sugar is used to produce ethanol than it was a few years ago.
Due to low production, on 1st October of sugar Opening stocks are likely to come down to around 3.3-3.4 million tonnes from last year's 5 million tonnes. This means, this year's opening stocks of sugar are estimated to be roughly two-thirds of last year's level. According to a TOI report, officials said the remaining stock would be sufficient to meet the demand till fresh supply arrives.
Sugar Prices Hike: The price of sugar reached a new high! Sweetness will be expensive during the festival?
Why the price increase?
To address supply concerns, the government on Thursday allowed duty-free import of one million tonnes of raw sugar. Retail sugar prices rose to Rs 58.2 per kg on Friday, up 20% from a month ago and nearly 26% from a year ago.
The food ministry said the rise in sugar prices was due to a number of factors, including lower-than-expected domestic production, increased demand ahead of the festive season, weather-related crop damage, global supply shortages and speculation and hoarding by some.
How much sugar is used in ethanol production?
Ruling out the possibility of an impact on rates of sugar consumption for ethanol production, the ministry said the share of sugar used in this production has declined from an estimated 12% in 2022-23 to an estimated 9% in 2025-26. He noted that about three-fourths of the ethanol produced in the country is now produced from grain.
States have forecast sugar production for the current season (October-September 2025-26) at 34.3 million tonnes, while industry body ISMA has projected it at around 34.8 million tonnes. Officials said Maharashtra experienced heavy rains in October last year and the sugarcane crop in Uttar Pradesh and Maharashtra was affected by diseases like red rot and shenda pokharni.
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Ban on export
Officials said there were early signs of a drop in output in January, but factories continued to crush sugarcane. A source said exports started in March and were banned in early May when production showed signs of decline. Shortage of sugar supply is a global problem, the government says, and forecasts a global sugar shortage of 3.3 million tonnes for 2026-27.