A stir has been created in the whole country because of sugar. Social media suggests that there has been a rise in the prices of sugar because of the ethanol industry. But does this hold truth? How has the government reacted to the rise in prices and what are the reasons behind it? Find out below.
There has been a 15 percent increase in the average price of sugar in India, which is currently above ₹55.7 per kg as of August 20th. The cost of sugar in the retail market in Delhi has surpassed ₹60 per kg. As per the government data, there has been a 20 percent rise in the prices within a year. However, much of this increase has happened in the past few days.
As per National Commodity and Derivatives Exchange Limited (NCDEX), the wholesale price of sugar in Kolhapur, which happens to be one of the major sugar trade centers of India, was ₹5,750 per quintal on August 20th. Find out what the reason behind the sharp rise in the prices of sugar and its rate in your city.
This surge in sugar prices has forced the government to allow duty-free imports of 1 million metric tons (LMT) of sugar for the first time in a decade. Additionally, to prevent hoarding, limits have been imposed on sugar stockpiling by wholesale buyers and dealers, and physical verification of stocks at sugar mills has been ordered.
India is the world's largest producer of sugar. Therefore, India requires 270-297 LMT of sugar for the domestic market alone. Concerns about hoarding and supply shortages are believed to be the reason for the increase in sugar prices.
This is due to floods in some states and insufficient rainfall in others, which has damaged the sugarcane crop. These incidents have occurred in major sugarcane-producing states like Uttar Pradesh, Maharashtra, and Karnataka.
In a press release, the government stated that sugar production for the current season is estimated to be around 30.6 million metric tons (LMT), while the initial estimate for sugarcane-growing states was around 343 LMT. The government attributed this decrease in production to the sugarcane diseases 'red rot' and 'top borer', as well as waterlogging in the fields due to excessive rainfall.
Meteorological data shows that at least 35 districts in Uttar Pradesh, including several major sugarcane-producing districts, have experienced rainfall deficiency. Uttar Pradesh is the largest sugarcane producer.
Many major sugarcane-producing districts in Maharashtra, such as Solapur, Latur, Nandurbar, Beed, Parbhani, and Ahmednagar, have experienced rainfall deficiency as of August 21st. This state is the second largest sugarcane producer in India. Karnataka, the third-largest sugarcane producer, has received 22 percent less rainfall than normal this year.
Although the government said in a statement, "Despite lower-than-expected production, there are sufficient sugar stocks in the country to meet domestic demand until the new crushing season begins in October," the quantity of the stock was not disclosed.
Many on social media have attributed this to the diversion of sugar to ethanol production to meet the target of 20 percent ethanol blending in petrol. However, data shows that despite fluctuations in total sugar production, the allocation of sugar for ethanol production has remained largely stable.
On August 21, the government stated that approximately 9 percent of the total sugar produced in the country in 2025-26 was used for ethanol production. Furthermore, the government also stated that approximately three-quarters of the ethanol produced in the country now comes from grains, primarily maize.
