Explained | Sugar prices are rising sharply — this is what is driving the sudden spike
Sugar prices have skyrocketed in the market. In a bid to ease prices, the Centre has permitted imports of 10 lakh tonnes of raw sugar until 31 October.
Sugar prices in India have surged nearly 40% in the last two months, reaching ₹65 per kg as demand surges ahead of the festive season, according to the BBC. E-commerce platforms have imposed purchase caps, and some retailers limit purchases to 3-5 kg at a time. The opposition attributes the price rise to the diversion of sugarcane to ethanol production, while farmers' groups blame large traders.
The government, monitoring the situation, attributes the increase to lower domestic production, festive-season demand, weather-related crop damage, tighter global supplies, and speculation and hoarding. The government estimates a global sugar deficit of 3.3 million tonnes in 2026-27, with international sugar prices up by 16% to $552 a tonne.
The sugar industry claims only about 25% of ethanol production uses sugar-based sources, while the ethanol blending program has improved sugar mills' financial health. The government has allowed imports of 10 lakh tonnes of raw sugar until October and introduced stock limits for dealers and bulk buyers.
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