Context
Recently, the Government announced measures to contain rising sugar prices, including stock limits, checks against hoarding and duty-free import of raw sugar. The price rise has been attributed mainly to lower domestic production, festive demand, crop damage and tightening global supplies.
Explanation
- India is among the world’s major producers and consumers of sugar, with sugarcane also serving as a feedstock for ethanol production.
- Sugar production is estimated at 306 LMT in the current season, lower than initial estimates, partly due to Red Rot, Top Borer and waterlogging.
- The government stated that sugar diversion to ethanol declined from about 12% in 2022-23 to 9% in 2025-26; most ethanol now comes from grains, particularly maize.
- Ethanol production from surplus sugar can improve sugar-mill liquidity and facilitate timely payment of cane dues to farmers.
- To curb hoarding, a 400-tonne stock limit has been imposed on dealers for August-November 2026.
- The government has also permitted duty-free import of 10 LMT of raw sugar and encouraged early crushing to augment supply.
- Such supply-side interventions seek to balance consumer price stability and farmers’ interests.
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Sugar Price Control: Balancing Markets and Farmers