Sugar prices rise for second day, retail rates cross Rs 65 per kg

Sugar prices rose for the second day in a row on Wednesday by over Re 1 per kg in the retail market due to an uptick in festive demand, according to government data.

Retail prices of the sweetener continue to be high despite a nearly 20 per cent decline in ex-mill rates after the government's decision to allow imports of 10 lakh tonnes of raw sugar .

As per the data compiled by the Department of Consumer Affairs (Price Monitoring Division), the all-India average rate of sugar is Rs 65.05 per kg on August 26 as against Rs 63.97 per kg on Tuesday.

The current average price of sugar is 34 per cent higher from Rs 48.68 per kg a month back, while the rate is 41 per cent more than the year-ago level, when sugar was available at Rs 46.27 per kg.

The data showed that the maximum selling price on Wednesday was Rs 76 per kg, while the modal rate was Rs 65 per kg.

Wholesale rates also edge higher

The government and sugar industry bodies have said that the ex-mill rates have fallen in the past few days. However, the impact is yet to be seen at the retail level.

According to the data, the wholesale price of sugar also rose marginally to 60.36 per kg on Wednesday. The average wholesale rate was Rs 45.34 per kg a month ago and Rs 43.02 per kg a year ago.

Ex-mill prices fall after government measures

Earlier this week, Food Secretary Sanjeev Chopra had said the ex-mill price of sugar has declined by 18 per cent to Rs 55 per kg since the government's decision to allow imports and clamp down on speculation and hoarding of the sweetener.

Ex-mill prices of sugar had shot up to a record Rs 67 per kg last week, a spike Chopra attributed to mills "jacking up" rates.

"Ex-mill prices of sugar, which were jacked up by mills, have started cooling down. They have declined to Rs 55 per kg and will further drop in the coming days," Chopra told PTI.

The jump in prices, he said, was not rooted in fundamentals, as the country has ample sugar stocks despite production for the 2025-26 marketing year (October-September).

Centre steps up efforts to control prices

To control prices, the Centre has recently allowed imports of 10 lakh tonnes of raw sugar by October 31. It has imposed stock holding limits on dealers as well as bulk consumers like beverage makers. Exports were already banned a few months back.

Sugar output and demand estimates

According to the Indian Sugar and Bio-Energy Manufacturers Association (ISMA), India's net sugar production (after diversion to ethanol) is estimated at around 279 lakh tonnes in the 2025-26 marketing year (October-September), while the opening stock was 50 lakh tonnes.

The annual domestic demand is projected at 280-285 lakh tonnes, while the country exported 8 lakh tonnes of the sweetener before the government imposed a ban.

ISMA has projected the closing stock at 35 lakh tonnes at the end of September.

The association noted that 30 lakh tonnes of sugar is estimated to be diverted in the current marketing year from the gross sugar output of 309 lakh tonnes.

ISMA initially estimated that the country's gross sugar output would be 345 lakh tonnes for the 2025-26 marketing year, but later revised downwards as sugarcane crop was affected by bad weather and pests.