Govt Blames Sugar Mills For Price Spike, Says Ethanol Diversion Not Responsible
The government on Friday rejected claims that diversion of sugar for ethanol production was behind the sharp rise in sugar prices, saying there was no shortage in the country and that mills had increased prices without justification. Food Secretary Sanjeev Chopra said India has sufficient stocks to meet domestic demand despite lower production in the 2025-26 marketing year. The government has…
The Indian government has dismissed allegations that diverting sugar for ethanol production is responsible for recent price hikes, stating there is no shortage and mills have raised prices unjustifiably. Food Secretary Sanjeev Chopra affirmed India has sufficient stocks to meet domestic demand despite a lower production forecast for the 2025-26 marketing year.
He urged sugar-producing states to crack down on hoarders, black marketers, and speculators while preparing for an early crushing season. Sugar mill prices surged from ₹47-48 to ₹62 per kg within seven to ten days, a change Chopra deemed unjustified. Retail sugar prices went up from ₹48 to ₹56 per kg. The government claims only 28 lakh tonnes of sugar have been diverted for ethanol this season, accounting for only a quarter of ethanol production now.
Sugar production has dropped to 306 lakh tonnes in the 2025-26 marketing year due to disease and excess rainfall, but ample stocks exist with no real reason for price increases. The government expects early crushing to boost supply, with an additional 10-12 lakh tonnes of sugar available in October. Imports of raw sugar will also be allowed until October 31 to increase domestic supplies.
The government is taking preventive measures to prevent hoarding and ensure stocks are released physically into the market.
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