Full Breakdown
India’s Sugar Price Surge Threatens Festive Sweet Traditions
By Drooid · · How we work
Core Event – Soaring Sugar Prices Amid Festival Season
Retail sugar prices have climbed to as high as 75 rupees per kilogram, up from 40 rupees in September 2025, as India enters its peak festive period. Government data project total sugar production for the October 2025 – September 2026 season at 30.6 million tonnes, 11 percent lower than the earlier estimate of 34.3 million tonnes. To ease domestic pressure, the government has authorised duty-free import of one million tonnes of raw sugar, with the import cap remaining in force until 31 October 2026.
Background & Context
India is the world’s largest sugar consumer (29–32 million tonnes annually) and the second-largest producer. This year, reduced sugarcane cultivation, lower rainfall linked to an El Niño pattern, and farmer shifts to alternative crops have curtailed supplies. The government disputes claims that ethanol-blending programmes have materially reduced sugarcane availability.
Data & Statistics
- Annual sugar consumption: 29–32 million tonnes (?15 percent of global use).
- Expected 2025-26 production: 30.6 million tonnes (down 11 percent).
- Retail price peak: 75 rupees/kg; early September average: ~60 rupees/kg.
- Import programme: duty-free raw sugar, up to 1 million tonnes, capped on 31 Oct 2026.
Impact on Low-Income Consumers
Labourer Jai Krishan, 43, from Bihar, saves 15,000 rupees (~$160) for his Diwali trip home and typically spends about $35 on sweets. With prices rising, he must cut back on clothing and other goods to afford the tradition. Resident Aman Jaswal of Patna notes sweets now cost 15-20 percent more, tightening household budgets during festivals.
Impact on Sugarcane Farmers
Punjab farmer Mukesh Chandra says the cost of producing 100 kg of sugar is 470 rupees, while the return is only about 416 rupees, a loss of roughly 54 rupees per 100 kg. Uttar Pradesh farmer Suresh Pal adds disease-prone varieties, soil degradation and rising irrigation costs further squeeze margins. Delayed payments from sugar mills limit farmers’ ability to invest in better seeds or technology.
Official Statements & Responses
The government rejected the claim that ethanol-blending has significantly tightened supplies, pointing to a decline in the share of sugar diverted to ethanol from about 12 percent in 2022-23 to roughly 9 percent in 2025-26.
Criticism & Opposition
Farmers and agricultural officials argue the response does not address root causes. Agriculture-marketing principal Abhinav Chandra says multiple factors have reduced the amount of sugarcane available for processing, pushing up prices.
Conflicting Reports & Gaps
- Ethanol diversion: Government data show a reduced share to ethanol, while farmers claim the programme still limits cane availability.
- Price levels: Al Jazeera reports peak retail prices of 75 rupees/kg; Channel NewsAsia cites an all-India average of 60 rupees/kg in early September, indicating regional variation.
What’s Next
The duty-free import ceiling remains in effect until 31 October 2026, covering the core Diwali period. Market observers will watch whether imported raw sugar can translate into lower refined-sugar prices for consumers and whether additional state interventions can stabilize farmer incomes ahead of the festive season.