Sugar prices have increased in recent weeks, from 48.18 per kg on 20 July 2026 to 55.70 per kg on 20 August 2026. The Government is closely monitoring the situation and has taken a series of measures to ensure adequate availability of sugar and stable prices for consumers.

Rise in sugar prices cannot be attributed to ethanol

It is incorrect to attribute the recent increase in sugar prices to diversion of sugar for ethanol production.

In fact, the share of sugar diverted for ethanol has declined from around 12% in 2022-23 to around 9% in 2025-26. Moreover, nearly three-fourths of the ethanol produced in the country now comes from grains, particularly maize.

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, weather-related damage to the sugarcane crop, tightening global sugar supplies and speculation and hoarding by some sections of the industry.

Sugar production lower than initial estimates

Sugar production during the current season is expected to be around 306 LMT, compared to the initial estimate of around 343 LMT by sugarcane-growing States.

Production has been affected by Red Rot and Top Borer disease in sugarcane, as well as waterlogging caused by excess rainfall.

Despite the lower than estimated production, adequate sugar stocks are available in the country to meet domestic demand until the new crushing season begins in October.

Sugar prices are rising globally too

The tightening of sugar supplies is a global phenomenon and is not limited to India.

The global sugar deficit for 2026-27 is estimated at around 33 LMT. Concerns over weather conditions have further affected the global outlook.

As a result, international sugar prices have risen sharply from $474 per tonne on 30 June 2026 to $552 per tonne on 20 August 2026 an increase of over 16% in less than two months.