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Sugar prices rise over 10% in 6 days amid tight supplies ahead of Diwali
Demand for sugar rises ahead of Diwali when sweetmakers prepare for the festive season
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Sugar prices are rising again, up over 10% in the past six days, amid tight supplies ahead of Diwali, when demand for sugar typically rises as households and sweetmakers prepare for the festive season. Ex-mill rates in Uttar Pradesh rose to ₹5,200 per quintal on October 12 from ₹4,600 on October 6 (up 13%). The prices in Maharashtra rose to ₹5,100 from ₹4,350 over the same period (up 17%), according to local traders.
“There is not enough sugar in the country. Even the additional 300,000 tonnes, which was supposed to be exported but was made available for domestic consumption, has not helped. It has already been absorbed in September,” said GK Sood, an agriculture expert and independent director.
Sood said restrictions on stocks and trade have squeezed the supply pipeline, while the additional sugar made available for domestic consumption had failed to provide lasting relief.
The Centre has been taking measures to increase availability and curb hoarding, including permitting duty-free imports of 1 million tonnes of raw sugar, imposing stockholding limits on dealers and restricting bulk consumers’ purchases from the domestic open market.
The government is now concerned about another rise in sugar prices by Diwali as the industry’s plan to start crushing sugarcane early has run into a shortage of harvest-ready cane in Maharashtra and Karnataka, a government official said.
Industry associations proposed bringing forward the 2026-27 crushing season to ensure fresh sugar reached the market before the festive demand peak. The government relied on the industry’s assurance that some mills could begin operations from October 15.
Crushing is unlikely to begin at scale before November, the official said. A significant amount of standing cane in parts of Maharashtra and Karnataka has dried out, while farmers are reluctant to harvest the remaining crop early without compensation for potential losses in yield and sugar recovery.
Sugar recovery is the proportion of sugar extracted from cane during processing. Harvesting before the crop matures sufficiently can reduce recovery, lowering the amount of sugar produced from each tonne of cane.
A meeting with Karnataka farmers on October 12 failed to resolve differences over early crushing as farmers have demanded a higher support price citing rising production costs and an increase in the minimum selling price of sugar from ₹31 to ₹50 per kg. Only a few mills may begin operations early, but the additional production is unlikely to be substantial if sufficient cane is unavailable.
The delay threatens to leave the market dependent on existing stocks and imported sugar until the new season gathers pace, just as festive demand peaks.
Measures to boost supplies are yet to ease pressure. The Centre stepped up its response in August after sugar prices rose sharply ahead of the festive season. On August 21, the government cited lower-than-expected domestic production, weather-related crop damage, higher seasonal demand and possible hoarding and speculation among the factors behind the increase.
It permitted duty-free imports of 1 million tonnes of raw sugar to augment domestic supplies. It also imposed stockholding limits on dealers to discourage hoarding and ensure sugar moved through the supply chain.
The limits were tightened further in September and October. The government also restricted bulk consumers to 15 days of consumption for sugar purchased from the domestic open market, while allowing them to hold up to 30 days of stocks if the additional quantity was sourced exclusively from imported sugar under specified schemes.
The Centre has ordered weekly stock disclosures by bulk consumers and physical verification of stocks at mills.
The government, on the industry’s promise, also expected an early start to crushing to increase October production from the usual 300,000-400,000 tonnes to more than 1 million tonnes, but may have to reassess its strategy.
