The government stated on Friday that the recent rise in sugar prices is not due to the diversion of sugar for ethanol. Instead, they pointed to lower-than-expected local production, increased demand during the festive season, and damage to crops caused by weather conditions.
Sugar prices at retail have seen a notable jump, climbing from ₹48.18 per kilogram on July 20 to ₹58.20 per kilogram by August 21, according to the consumer affairs ministry’s pricing data. This spike in prices has led the government to put in place measures to prevent hoarding and allow sugar imports for the first time in almost ten years to boost local supply before the festive period.
In a statement, officials noted that the amount of sugar being redirected for ethanol production has dropped from approximately 12% of total production in 2022-23 to around 9% in 2025-26 due to a decline in overall output. They revealed that nearly 75% of the ethanol produced in India now comes from grains, particularly maize.
For the current season, domestic sugar production is projected to reach about 30.6 million tonnes, significantly lower than the earlier estimate of 34.35 million tonnes. This decline has been attributed to diseases affecting sugarcane crops such as red rot and top borer, as well as waterlogging caused by excessive rainfall.
