NEW DELHI: The Centre on Friday said it was closely monitoring the recent rise in sugar prices and rejected claims that the increase was linked to the diversion of sugarcane for ethanol production.In a press release, the ministry of consumer affairs, food and public distribution said the share of sugarcane diverted for ethanol production has declined, while nearly three-fourths of the country’s ethanol production now comes from maize.“Sugar prices have increased in recent weeks, from Rs 48.18 per kg on 20 July 2026 to Rs 55.70 per kg on 20 August 2026. The government is closely monitoring the situation and has taken a series of measures to ensure adequate availability of sugar and stable prices for consumers,” the ministry said.“It is incorrect to attribute the recent increase in sugar prices to diversion of sugar for ethanol production. In fact, the share of sugar diverted for ethanol has declined from around 12% in 2022-23 to around 9% in 2025-26. Moreover, nearly three-fourths of the ethanol produced in the country now comes from grains, particularly maize,” it added.The ministry attributed the rise in sugar prices to a “combination of factors”, including lower domestic production, increased demand, hoarding and tightening global supplies.“Sugar production during the current season is expected to be around 306 LMT, compared to the initial estimate of around 343 LMT by sugarcane-growing states. Production has been affected by Red Rot and Top Borer disease in sugarcane, as well as waterlogging caused by excess rainfall,” the ministry said.“Despite the lower than estimated production, adequate sugar stocks are available in the country to meet domestic demand until the new crushing season begins in October,” it added.The ministry also said that tightening supplies globally had contributed to the rise in sugar prices.“The tightening of sugar supplies is a global phenomenon and is not limited to India. The global sugar deficit for 2026-27 is estimated at around 33 LMT. Concerns over weather conditions have further affected the global outlook. As a result, international sugar prices have risen sharply from $474 per tonne on 30 June 2026 to $552 per tonne on 20 August 2026 – an increase of over 16% in less than two months,” it said.The ministry said the government was taking steps to curb hoarding and increase sugar supplies.“A stock limit of 400 tonnes has been imposed on sugar dealers across the country from 1 August to 30 November 2026. From 1 September, bulk consumers will not be permitted to hold sugar stocks exceeding 15 days of consumption. Joint teams of Central and State Government officials are carrying out physical verification of sugar stocks at mills to check hoarding and artificial scarcity,” the ministry said.“As a precautionary measure, the government has decided to permit duty-free import of 10 LMT of raw sugar to further augment domestic availability. States and sugar mills have been advised to begin crushing from 15 October 2026. This is expected to raise October sugar production from the usual 3-4 LMT to more than 10 LMT, further improving availability during the festive season,” it added.The ministry said the ethanol programme had benefited farmers and strengthened sugar mills, while reiterating that the government would continue to monitor sugar stocks, prices and market practices.“The government remains committed to protecting the interests of both consumers and sugarcane farmers. It will continue to closely monitor sugar stocks, prices and market practices and take all necessary measures to prevent hoarding and unwarranted price increases while ensuring timely payment of dues to farmers,” it further said.
