New Delhi: India is not facing a sugar shortage as adequate stocks are available to meet domestic demand until the new crushing season begins in October, the government said on Wednesday.
It clarified that the share of sugar diverted for ethanol production has declined from around 12 per cent in 2022-23 to around 9 per cent in 2025-26. Moreover, nearly three-fourths of the ethanol produced in the country now comes from grains, particularly maize, it said, refuting claims that the diversion of sugar for producing ethanol was leading to the price rise of the sweetener.
Simultaneously, retail sugar prices for consumers have also remained broadly stable, increasing by only around 3 per cent annually between August 2024 and July 2026, according to the government factsheet.
Sugar prices have increased in recent weeks, from Rs 48.18 per kg on July 20 to Rs 55.70 per kg on August 20. This reflects an increase of around 15.6 per cent within one month. This suggests the current uptick largely reflects short-term supply and market factors, rather than a shift in the underlying price trend, the factsheet states.
The present increase in sugar prices is due to a combination of factors, including lower-than-expected domestic production, increased demand ahead of the festive season, and weather-related damage to the sugarcane crop. Besides, tightening global sugar supplies and rising prices, as well as speculation and hoarding by some sections of the industry, are other factors behind the price rise, the statement said.
Sugar production during the current season is expected to be around 306 LMT, compared to the initial estimate of around 343 LMT. Production has been affected by two factors: Red Rot and Top Borer disease, and waterlogging caused by excess rainfall. However, despite the lower-than-estimated production, adequate sugar stocks are available in the country to meet domestic demand. The new crushing season will begin in October.
The tightening of sugar supplies is a global phenomenon and is not limited just to India. The global sugar deficit for 2026-27 is estimated at around 33 lakh MT. As a result, international sugar prices have risen sharply from $474/tonnes on June 30, 2026 to $552/tonnes on August 20, 2026. This marks an increase of over 16 per cent in less than two months, the factsheet points out.
It also states that the ethanol programme has helped sugarcane farmers and strengthened sugar mills. On average, India produces around 300-340 lakh MT of sugar annually and its domestic sugar consumption is around 280-290 lakh MT each year.
In years of surplus production, excess stocks block the funds of sugar mills and delay payments to sugarcane farmers. Diversion of excess sugar towards ethanol has helped address this structural problem and improved the financial health of sugar mills. The area under sugarcane cultivation has also increased from 49.27 lakh hectares in 2015-16 to 58.87 lakh hectares in 2025-26.
As of August 20, 2026, 97 per cent of sugarcane dues for the 2025-26 sugar season have already been paid to farmers. The improved financial position of sugar mills has reduced their dependence on government support, the statement added.
(IANS)
