Sugar Prices Rise in India: Rates Near Rs 80/Kg; Is Ethanol Really Behind the Spike? Check Key Reasons

Sugar prices are rising in several parts of India, putting households and small food businesses under pressure. In Chhatrapati Sambhajinagar, Maharashtra, loose sugar is reportedly selling at around Rs 75-80 per kg. The increase has raised concerns about whether sugar could become more expensive for consumers, especially with the festive and wedding season approaching.

Why Sugar Prices Are Rising: Lower Cane Production and Tighter Supply Trigger Concern

The rise in sugar prices is not linked to one single reason. A combination of lower sugarcane production, reduced acreage, shorter crushing seasons and traders holding stocks has tightened the market.

In simple terms, less sugarcane can mean less sugar production. When supplies are expected to be lower while demand remains steady, prices tend to move higher.

Government data shows that the area under sugarcane cultivation has declined in recent years. Sugarcane production has also fallen from earlier levels. This has added to concerns about how much sugar will be available in the coming months.

Former Maharashtra Sugar Commissioner Shekhar Gaikwad said increasing sugarcane production would take time. According to him, even a new government policy would need around 30-36 months before its impact could be seen.

Sugar Price Hike Alert: Rates Touch Rs 80/Kg in Maharashtra

Sugar is used every day in homes, but its impact goes beyond the price of a packet. Sweet shops, bakeries, restaurants, tea stalls, beverage companies and other food businesses also depend heavily on sugar. If their input costs increase for a longer period, some businesses could eventually pass part of the additional cost on to customers.

The impact could become more visible during the festive season when demand for sweets, desserts and other sugar-based products usually increases.

Sugar Price Rise: Is Ethanol Really Behind Spike?

The ethanol issue has become an important part of the debate, but industry experts say it is not the only reason behind the current increase. The government has promoted ethanol blending as a way to reduce India's dependence on imported crude oil and create another market for farmers and sugar mills. Some opposition leaders have argued that diverting sugarcane or sugar towards ethanol leaves less sugar available for consumers.

However, industry representatives say the amount of sugar being diverted for ethanol has reduced compared with earlier years. They therefore believe that blaming the entire price increase on ethanol does not explain the current situation.

The bigger concern at present is the supply of sugar itself. Lower sugarcane availability, weaker production expectations and traders holding stocks are all influencing prices.

Maharashtra Sugar Mills Face Another Problem

Maharashtra is one of India's biggest sugar-producing states, making the situation there particularly important for the overall market. Sugar mills in the state are reportedly crushing sugarcane for fewer days than they used to. Earlier, some mills operated for around 150 days during the crushing season, while the period has now fallen to nearly 100 days in some cases.

The economics of sugar production is one reason behind the pressure on mills. Mills have to pay farmers for sugarcane, while the price they receive for sugar may not always rise at the same pace. When production becomes less profitable, mills can face financial pressure. This can also affect their ability to continue crushing large quantities of sugarcane.

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