Not ethanol, but low output, festive demand behind sugar price hike: Centre

The Indian government has ruled out ethanol as a primary factor in the recent rise in sugar prices, attributing the surge instead to reduced domestic production and heightened demand during the festive season. According to official statements released on Friday, average retail sugar prices climbed from ₹48.18 per kilogram on July 20 to ₹58.20 per kilogram on August 21, as per data from the consumer affairs ministry's price portal. In response, authorities have intensified efforts to prevent stockpiling and have permitted sugar imports for the first time in almost ten years, aiming to bolster supply before the holiday period. The government emphasized that the decline in sugar prices was not due to increased use of sugar for ethanol production. It noted that the proportion of sugar used for ethanol had fallen from approximately 12% of total production in the fiscal year 2022-23 to roughly 9% in 2025-26, even as overall output decreased. Furthermore, nearly three-quarters of ethanol currently produced in India is sourced from grains, primarily maize, according to the government. This shift reflects broader changes in the industry, including adjustments in agricultural practices and resource allocation. Domestic sugar production this season is projected to amount to about 30.6 million tonnes, significantly less than the initial forecast of 34.35 million tonnes. The shortfall is attributed to several factors, including the impact of red rot and top borer diseases on sugarcane crops, as well as waterlogging caused by excessive rainfall. These conditions have disrupted farming schedules and reduced yields, contributing to the current market imbalance. Protests against the rising cost of sugar and other essential goods have been reported in various parts of the country. In Patna, Bihar, members of the Sarv Ekta Manch gathered at Dak Bungalow crossing to voice their concerns over the price hikes. Such demonstrations highlight the growing public frustration with economic pressures and the perceived lack of effective government intervention to stabilize essential commodities. The government's decision to permit sugar imports marks a notable departure from previous policies, which had largely restricted such actions. By allowing imports, officials aim to increase the available supply of sugar in the market, thereby mitigating upward pressure on prices. However, this move has sparked discussions among economists and policymakers regarding its long-term implications for domestic producers and the broader agricultural sector. As the festive season approaches, the government is under increasing scrutiny to ensure that measures taken to address the price surge effectively meet the needs of consumers while supporting local farmers. The situation underscores the complex interplay between agricultural productivity, market dynamics, and policy decisions in shaping everyday costs for millions of households. With the winter months looming, the effectiveness of these interventions will likely become a key focus for both the administration and the public.