Why is there a sudden increase in sugar prices | Explained

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The Story So Far: Retail and wholesale prices of sugar witnessed about 40% increase, in some States up to 50%, compared to the same time of last year. In eight States such as Uttarakhand, Punjab, Madhya Pradesh and Odisha, the price for a kilogram of sugar touched more than ₹65. As on August 23, Odisha recorded the highest price, ₹67.4 for a kilogram, which was ₹55 a week ago, ₹50.78 a month ago and ₹46.89 on August 23, 2025.

Even as the Opposition raised the issue last week, the Government was unable to curb the price rise. The Opposition even blamed the diversion of sugarcane for making ethanol as the reason for the sharp increase of the daily essential product. The farmers’ groups argued that the price rise was artificially created by big traders ahead of the festive season. The Government, in its response, said it is monitoring the situation closely and added that a combination of factors, including lower-than-expected domestic production, increased demand ahead of the festive season, weather-related damage to the sugarcane crop, tightening global sugar supplies and speculation and hoarding by some sections of the industry are the reasons for the price hike. The Union Commerce Ministry also issued a notification allowing import of 10 lakh metric tonnes (LMT) of sugar till October 31, 2026.

The all India average price for a kilogram of sugar was ₹46.3 on August 23, 2025. But as on August 23, 2026, the price increased to ₹62.47, an increase of 34.92%. The increase started within a month as on July 23 of this year, the price was ₹48.62, meaning that the price increased 28.49% in 30 days. Similarly, the wholesale rate for 100 kilograms of sugar on August 23 was ₹,5801.29. A month ago, the rate was ₹4,510.76 and last year, on the same date, it was ₹4,313.32. About 18 States and Union Territories witnessed an increase of 40% to 50% increase in sugar price over the year. In Uttarakhand, where the price on August 23 was ₹67 for a kilogram of sugar, the second highest retail price, it was ₹45 in last year, on the same date. In west Bengal, it was ₹66.17 and ₹47.5, in Rajasthan ₹65 and ₹43.33, in Madhya Pradesh ₹65.38 and ₹44.98 and in Delhi it was ₹65 and ₹45 respectively.

The Opposition, which has been critical of the Government’s ethanol blending programme in fuels, blamed that the diversion of sugarcane for ethanol production caused the increase in sugar prices. Aam Aadmi Party chief Arvind Kejriwal said diverting sugarcane towards ethanol production has reduced sugar output, pushing sugar prices up by ₹20 per kg in just 17 days. Congress general secretary Jairam Ramesh demanded an immediate review of the E20 policy and sought the provision of non-ethanol petrol for consumers.