New Delhi, August 26, 2026 (Yes Punjab News)
India has adequate sugar stocks to meet domestic demand until the new crushing season begins in October, the government said on Wednesday, ruling out any shortage of the sweetener despite a sharp rise in prices in recent weeks.
According to a government factsheet, the share of sugar diverted for ethanol production has declined from around 12 per cent in 2022-23 to about 9 per cent in 2025-26. Nearly three-fourths of India’s ethanol production now comes from grains, particularly maize, it said, rejecting claims that sugar diversion for ethanol was driving up domestic sugar prices.
Retail sugar prices remained broadly stable over the longer term, rising by around 3 per cent annually between August 2024 and July 2026. However, prices increased from ₹48.18 per kg on July 20 to ₹55.70 per kg on August 20, a rise of around 15.6 per cent in a month.
The government attributed the recent increase to several factors, including lower-than-expected domestic sugar production, higher demand ahead of the festive season and weather-related damage to sugarcane crops. Tightening global supplies and international prices, along with speculation and hoarding by some sections of the industry, were also cited as contributing factors.
Sugar production in the current season is estimated at around 306 lakh metric tonnes (LMT), against an initial projection of approximately 343 LMT. Production has been affected by Red Rot and Top Borer diseases as well as waterlogging caused by excessive rainfall.
Despite the lower production estimate, the government maintained that domestic stocks are sufficient to meet consumption requirements until the new crushing season starts in October.
The government also pointed to a global tightening of sugar supplies. The global sugar deficit for 2026-27 is estimated at around 33 lakh MT, while international sugar prices rose from $474 per tonne on June 30 to $552 per tonne on August 20, an increase of more than 16 per cent in less than two months.
It said the ethanol programme had strengthened sugar mills and benefited sugarcane farmers. India typically produces around 300-340 lakh MT of sugar annually against domestic consumption of approximately 280-290 lakh MT.
The government said diverting surplus sugar towards ethanol had helped prevent excess stocks from blocking mill finances and delaying payments to farmers. Sugarcane cultivation has also expanded from 49.27 lakh hectares in 2015-16 to 58.87 lakh hectares in 2025-26.
As of August 20, 2026, around 97 per cent of sugarcane dues for the 2025-26 season had been paid to farmers, the government said, adding that stronger finances had reduced sugar mills’ dependence on government support.
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