NEW DELHI, AUG 21 (PTI): The government on Friday rejected claims that diversion of sugar for ethanol production was driving up sugar prices, attributing the recent rise to lower domestic output, festive-season demand, weather-related crop damage and hoarding.
The Ministry of Consumer Affairs, Food & Public Distribution said the share of sugar diverted for ethanol production had declined to around 9% in 2025-26 from 12% in 2022-23. Nearly three-fourths of India’s ethanol production now comes from grains, particularly maize.
Retail sugar prices rose to Rs 55.70 per kg on August 20 from Rs 48.18 on July 20.
To contain prices and ensure availability, the government has imposed a 400-tonne stock limit on dealers until November 30 and, from September 1, will restrict bulk consumers to stocks equivalent to 15 days’ consumption.
It has also approved duty-free imports of 1 million tonnes of raw sugar and ordered physical verification of stocks at mills to check hoarding and artificial scarcity. Domestic sugar production this season is estimated at 30.6 million tonnes, against an initial estimate of 34.3 million tonnes, due to Red Rot and Top Borer diseases and waterlogging caused by excess rainfall.
The government said existing stocks remain sufficient until the new crushing season begins in October.
Global supplies are also tightening, with sugar prices rising over 16% to USD 552 a tonne on August 20 from USD 474 on June 30. The government estimates a global sugar deficit of 3.3 million tonnes in 2026-27.
It said the ethanol programme had helped address structural sugar surpluses, strengthen mill finances and improve payments to farmers. As of August 20, 97% of sugarcane dues for 2025-26 had been paid.
States and mills have also been advised to begin crushing from October 15, which could raise October production above 1 million tonnes and improve supplies during the festive season.
Saturday, August 22, 2026