New Delhi: The festive season is about to begin and meanwhile the rising prices of sugar have increased the concern of the people. Till about two weeks ago, sugar was available at around Rs 45 per kg in many places, but now its price has reached Rs 65. In some markets the price is being quoted even higher than this. This means that common people have to spend about Rs 15 to 20 more per kg. This can also have a direct impact on the prices of sweets.
The relationship between festivals and sweets is very old in India. On festivals and auspicious occasions, sweets are prepared at home and people sweeten each other's mouths. At such times the demand for sugar also increases. But this time, even before the festival starts, a sharp increase in prices is being seen. Due to sugar becoming expensive, the cost of shopkeepers making sweets will increase. This may impact the prices of sweets in future. In such a situation, people may have to spend more money to buy sweets during festivals.
Is the price increase due to ethanol?
Amid rising sugar prices, the opposition has raised questions on the government's ethanol policy. It is alleged that a part of the sugarcane used to make sugar is being used in ethanol production. Due to this the production of sugar decreased and the price increased in the market. However, the whole picture is somewhat different. The annual consumption of sugar in India is about 280 lakh tonnes. According to ISMA data, 328 lakh tonnes of sugar was produced in 2022-23. Production in 2023-24 was 320 lakh tonnes, while in 2024-25 it came down to 261 lakh tonnes. Production in 2025-26 is estimated to be around 293 lakh tonnes.
Initial stock of sugar reduced
The reduction in production has also affected the sugar reserves. The new sugar season in India starts from October 1. The sugar available before this is called opening stock. The opening stock in October 2023 was around 56 lakh tonnes, which increased to 85 lakh tonnes in 2024. But in 2025 it will come down to 50 lakh tonnes. This time it is estimated to be only 30 to 40 lakh tonnes. There is increased pressure on prices due to less stock before festivals.
Weather and crop disease are also big reasons
Ethanol alone cannot be held responsible for the decline in sugar production. Changes in weather had an impact on the crop in major sugarcane producing states like Maharashtra and Karnataka. The yield of sugarcane per hectare decreased. Apart from this, diseases like red rot and top borer also caused damage to sugarcane. Due to these reasons, sugarcane production decreased by about 15 lakh tonnes. At the same time, about 25 lakh tonnes of sugarcane was used to make ethanol. That means ethanol definitely had an impact, but it is not the only reason for the increase in the price of sugar.
Government denied the allegation regarding ethanol
The government says that the use of sugar for ethanol production has reduced compared to before. The share of sugar for ethanol was about 12 percent in 2022-23, which will come down to about 9 percent in 2025-26. According to the government, about three-fourths of the ethanol produced in the country is now sourced from grains, especially maize. The government also said that the price of sugar increased by about Rs 8 in the last one month. On July 20, the price was around Rs 48, which reached around Rs 56 by August 20.
Government's eye on hoarding
The government has said that apart from the decrease in domestic production, increased demand before festivals, effect of weather and expensive sugar in the international market are also the reasons for the increase in prices. Global sugar prices have claimed to have risen by about 16 percent in the last two months. The government has also cited hoarding and speculation by some mills and businessmen as a reason. To keep prices under control, a stock limit of 400 tonnes has been imposed on sugar dealers from August 1. At the same time, from September 1, the stock limit for bulk consumers will be reduced to 15 days' requirement. This includes units like sweet sellers, confectionery and food processing.
India will import sugar after 10 years
The government has also given permission to import 10 lakh tonnes of duty free sugar till 31 October. Generally, there is 100 percent duty on sugar import. The government believes that increasing imports will improve supply in the domestic market and reduce pressure on prices. India has been among the sugar exporting countries for a long time, but this time after about 10 years it has had to adopt the import route. Now the government is trying to maintain the availability of sugar during festivals and keep the prices under control through action against import and hoarding.