Sugar prices surge up to 17% in 6 days
What's the story
Sugar prices have witnessed a major spike, surging over 13% in just six days. The rise is largely attributed to tight supplies and strong festive demand from households and sweetmakers ahead of Diwali. In Uttar Pradesh, ex-mill rates increased by 13% to ₹5,200 per quintal on October 12 from ₹4,600 on October 6. Meanwhile, Maharashtra saw an even bigger jump of around 17%, with prices hitting ₹5,100 per quintal.
Market analysis
Expert warns of nationwide sugar shortage
Agriculture expert and independent director GK Sood has warned of a nationwide sugar shortage. He said even an additional 300,000 tons released into the market hasn't been enough to meet demand.
Sood also noted that restrictions on stocks and trade have further tightened supply.
To combat this, the Centre has allowed duty-free imports of 1 million tons of raw sugar while imposing stockholding limits on dealers and banning bulk consumers from buying in the domestic open market.
Price worries
Government concerned about potential price hike before Diwali
Despite these measures, the government is still worried about another price hike before Diwali.
This is because the industry's plan to start crushing early has been delayed due to a shortage of harvest-ready cane in Maharashtra and Karnataka.
On October 12, the Centre decided to form a high-level joint committee within a week to address sugarcane farmers' concerns from both states.
Farmer demands
Farmers demand higher cane price, MSP of ₹50 per kg
As mills gear up for the 2026-27 season, farmers are demanding a higher cane price to offset rising production costs.
They also want the minimum selling price (MSP) of sugar increased from ₹31 per kg to ₹50 per kg.
The government's response to these demands and its impact on sugar prices in the coming weeks remain to be seen.