New Delhi. Sugar prices in the country have reached record levels. The ex-factory price of UP's M-grade sugar reached Rs 5,400 per quintal on Tuesday. Five percent GST is applicable on this. This rise in prices may continue in the coming days also. The rising prices of sugar have increased the problems of the Central Government. In the retail market, the sugar which customers were getting at Rs 45 per kg a month ago, has now reached a high of Rs 65. Despite the production shortfall, due to sugar export and ethanol production, sugar and stocks are expected to decline to record low levels at the end of the current season.
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Its effect is clearly visible on the prices of sugar in the domestic market. The ex-factory price of sugar in Maharashtra has reached around Rs 5,300 per quintal. After adding GST, its price is reaching Rs 5,550-5,600 per quintal. The effect of increase in ex-factory prices of sugar is also visible on wholesale prices. The wholesale price of sugar in Delhi has reached around Rs 5,800 per quintal. The impact of these increased prices will soon be visible in the retail market as well, where prices have already reached Rs 62-65 per kg.
Central Consumer Affairs Department data shows the price to be Rs 51.68
In the coming days, further increase in sugar prices during the festive season may increase the problems of the government. But the difference in prices proves the contradiction between ground reality and government figures. According to data from the Rate Monitoring Division of the Central Consumer Affairs Department, the average daily retail price of sugar is currently only Rs 51.68 per kg. In the last two months, wholesale prices of sugar have increased from Rs 4,400 per quintal to Rs 5,800 per quintal.
In this way, wholesale prices have increased by about 32 percent. Which is an unexpected jump in recent years. If this trend of increase in sugar prices continues, there may be a need for import of sugar to increase the availability. At present, the Central Government has imposed 100 percent customs duty on the import of sugar. Sources associated with the sugar industry said that due to the huge difference between the initial figures of the production season and the actual production, there has been an unexpected increase in prices and this increase may continue. On the other hand, when the festive season is round the corner and sugar prices are likely to continue rising, the government is bound to face trouble. If the government has to resort to duty-free import of sugar to meet this challenge, it will have an adverse impact on the domestic industry and sugarcane farmers.
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It is noteworthy that in view of the rise in sugar prices in the domestic market, the Central Government has set a limit on the storage of sugar across the country from August 1 to November 30 to curb hoarding and speculation. Earlier, the Central Government had also issued an order to conduct physical verification of the storage available with the sugar mills. But the measures taken by the government to keep sugar prices stable have not yielded any positive results so far.
Traders and middlemen started stockpiling sugar after the government fixed the sugar storage limit at 4,000 quintals for each dealer to prevent hoarding and black marketing. Due to this, instead of reducing the prices, the prices are increasing further. In fact, people associated with the sugar trade were already aware of the possible tight supply.
Surprisingly, the Food Ministry of the Central Government has accused the sugar mills of promoting speculative trend to increase the prices. A letter sent by the Sugar Directorate to sugar mills on August 14 said that many sugar mills have more stock of sugar than the quantity declared by them. Along with this, mills are delaying the supply of sugar after the deals are done, which is promoting speculation in sugar prices. The ministry has warned that if any discrepancy is found in the stock, action will be taken against the sugar mills as per the provisions of the Sugar Control Order, 2025 under the Essential Commodities Act.
Meanwhile, sugar mills have offered to start crushing for the upcoming season early to ensure supply. In return for this, sugar mills have asked for many concessions like exemption in GST. However, due to many practical difficulties, it will not be easy for sugar mills to start crushing ahead of time. It is estimated that at the end of the current season on September 30, 2026, the closing stock of sugar in the country may be between 30-33 lakh tonnes, which will be the lowest closing stock in several decades. This may increase pressure on supply in the first two months of the 2026-27 season.
Meanwhile, sugar mills have offered to start crushing for the upcoming season soon to ensure supply. In return for this, sugar mills have asked for many concessions like exemption in GST. However, due to many practical difficulties, it will not be easy for sugar mills to start crushing ahead of time. It is estimated that at the end of the current season on September 30, 2026, the closing stock of sugar in the country may be between 30-33 lakh tonnes, which will be the lowest closing stock in several decades. This may increase pressure on supply in the first two months of the 2026-27 season.
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The Central Government had ordered physical verification of stocks in sugar mills on July 24. This process was to be completed by August 14. But after the completion of physical verification of sugar mills, the central government has not yet made public the figures of sugar storage. If the government releases official data of sugar storage, it can help in curbing speculations in the market.