Why are sugar prices rising? Centre rejects ethanol link, cites five reasons behind surge
Sugar prices have risen to ₹55.70/kg from ₹48.18/kg in a month. The Centre rejects linking the surge to ethanol production, citing lower output, festive demand, crop damage, tighter global supplies, and speculation or hoarding as key reasons.
The government has rejected claims that diverting sugar for ethanol production caused recent price increases, attributing it to five other factors instead. These include lower domestic output, festive-season demand, weather-related crop damage, tighter global supplies, and hoarding by industry players. The Ministry of Consumer Affairs, Food & Public Distribution stated that sugar diverted for ethanol production has decreased to around 9% in the 2025-26 season from 12% in 2022-23, mainly due to reduced ethanol production from grains like maize.
Measures have been taken to curb hoarding and ensure supply, such as imposing stock limits on sugar dealers, allowing duty-free imports of 1 million tonnes of raw sugar, and ordering physical stock verifications at mills. Despite the rise in sugar prices, the government has noted adequate domestic stocks until the new crushing season begins in October, and India's ethanol programme aims to address surplus sugar by diverting it to ethanol production.
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