New Delhi, August 21, 2026 (Yes Punjab News)
The Centre on Friday rejected claims that diversion of sugar for ethanol production was responsible for the recent rise in sugar prices, saying the share of sugar diverted for ethanol has actually declined in recent years.
The Ministry of Consumer Affairs, Food and Public Distribution said sugar prices rose from Rs 48.18 per kg on July 20 to Rs 55.70 per kg on August 20, but attributed the increase to multiple factors, including lower-than-expected domestic production, higher demand ahead of the festive season, weather-related crop damage, tightening global supplies, and speculation and hoarding by some sections of the industry.
The government said the proportion of sugar diverted for ethanol production fell from around 12 per cent in 2022-23 to about 9 per cent in 2025-26. Nearly three-fourths of the ethanol produced in India now comes from grains, particularly maize, it added.
Sugar production in the current season is estimated at around 306 lakh metric tonnes (LMT), against an initial estimate of approximately 343 LMT by sugarcane-growing states. Production has been affected by Red Rot and Top Borer diseases, besides waterlogging caused by excessive rainfall.
Despite the lower output, the government said adequate stocks are available to meet domestic demand until the new crushing season begins in October.
Global sugar supplies have also tightened, with the global deficit for 2026-27 estimated at around 33 LMT. International sugar prices increased from $474 per tonne on June 30 to $552 per tonne on August 20, a rise of more than 16 per cent in less than two months.
India generally produces 320-340 LMT of sugar annually against domestic consumption of 280-290 LMT. The government said diverting surplus sugar towards ethanol has helped address excess stocks, improve the financial health of mills and ensure timely payments to farmers. As of August 20, 97 per cent of sugarcane dues for the 2025-26 season had been paid.
The Centre also said no sugar industry subsidy has been announced since 2021-22, compared with around Rs 14,600 crore provided between 2014 and 2021.
To contain prices, a stock limit of 400 tonnes has been imposed on sugar dealers from August 1 to November 30. From September 1, bulk consumers will also be barred from holding stocks exceeding 15 days of consumption.
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