Sugar Production Projected at 306 LMT for New Season; Government...
Ahead of the festive season, the Indian government has initiated comprehensive regulatory measures to control rising sugar prices. Despite a drop in...
By GT24x7 Reporter··GlobalToday24x7
In response to escalating domestic sugar prices ahead of the major festive season, the Government of India has introduced a series of regulatory interventions to ensure market stability and consumer relief. Official market data indicates that retail sugar prices rose from ₹48.18 per kg on July 20, 2026, to ₹55.70 per kg by August 20, 2026. Dismissing speculations that ethanol blending contributed to the price surge, government officials clarified that the share of sugar diverted toward ethanol production has declined significantly from nearly 12% in 2022-23 to around 9% in the 2025-26 season. Currently, nearly three-quarters of national ethanol production is derived from feedstocks like maize and damaged food grains rather than sugarcane juice or molasses.
The primary factors driving the recent price increase include lower domestic yields, heightened pre-festive market demand, severe crop damage, tight global supply conditions, and speculative hoarding by select industry traders. Total sugar output for the ongoing season is estimated at approximately 306 Lakh Metric Tonnes (LMT), down from initial state estimates of 343 LMT. Agricultural yields were hit by 'Red Rot' and 'Top Borer' diseases alongside heavy monsoon waterlogging across major sugarcane-producing states. Despite lower production, authorities confirmed that existing buffer stocks remain fully sufficient to satisfy consumer demand until the new crushing season commences in October. To prevent artificial scarcity, the government imposed a 400-tonne stock holding limit on dealers from August 1 to November 30, restricted bulk buyers to a 15-day consumption limit starting September 1, and sanctioned duty-free imports of 10 lakh tonnes of raw sugar.
Market Outlook, Ethanol Integration, and Farmer Dues
Government projections indicate that market supply will improve substantially once the new crushing season begins in October. Meanwhile, financial relief for sugarcane farmers has reached record levels, with over 97% of total dues for the 2025-26 season successfully cleared by August 20.
Official sources reaffirmed that utilizing surplus sugar for ethanol production has historically resolved structural liquidity issues for sugar mills, enabling timely FRP payments to farmers and strengthening the rural agricultural economy without destabilizing domestic retail markets. In addition, the Ministry of Consumer Affairs has instructed state enforcement agencies to actively audit regional godowns, inspect wholesale markets, and initiate legal action against entities engaging in unfair trade practices or black-marketing ahead of the festival period.