Sugar Prices Cooling, Domestic Availability Strong Ahead Of Festivals: Industry Bodies

India has sufficient sugar stocks to meet domestic demand during the upcoming festive season, industry bodies ISMA and NFCSF said on Wednesday, rejecting concerns over a structural shortage even as retail prices remain elevated.

The Indian Sugar & Bio-energy Manufacturers Association (ISMA) and the National Federation of Cooperative Sugar Factories (NFCSF), in a joint statement on Wednesday said domestic availability remained resilient and that coordinated measures with the government had helped stabilise supplies.

The industry bodies said pan-India average ex-mill prices were around ₹39.5-₹40 per kg in June, ₹40-₹40.5 per kg in July and ₹41-₹41.5 per kg in August, below the industry's average production cost of about ₹42 per kg.

According to ISMA and NFCSF, a brief rise to ₹49-₹50 per kg in the third week of August was limited to 2-3 lakh tonnes of sugar and did not represent broader season economics. They said ex-mill prices had since fallen by nearly 30%, while retail prices had eased to around ₹62 per kg, which are still high.

The associations also said mills were advancing the start of the 2026-27 crushing season by 10-15 days, alongside continued special crushing operations in Tamil Nadu and Karnataka. The government has allocated 13 lakh tonnes under the fortnightly sales quota for the first half of September, they said.

Stocks, Imports And Fresh Output

ISMA and NFCSF said net domestic sugar production for 2025-26 was about 279 lakh tonnes after 30 lakh tonnes was diverted towards ethanol, against estimated domestic consumption of 280-285 lakh tonnes.

They projected closing stocks of around 35 lakh tonnes by the end of September.

The industry bodies also pointed to a 10-lakh-tonne duty-free import allowance under TRQ, of which around 8 lakh tonnes has been allocated, along with a further 2-lakh-tonne raw sugar import window and 3-3.5 lakh tonnes expected from refiners by October 15.

Government Tightens Stock Limits

The industry’s assessment comes amid government efforts to contain sugar prices. The Centre has cut the stockholding limit for dealers from 4,000 quintals to 2,000 quintals from September 15 to November 30, while retaining the 4,000-quintal limit for Kolkata and its extended metropolitan areas, as per PTI.

The Food Ministry said the measure was intended to ensure availability and curb hoarding and speculative trading.

Dealers also cannot retain stocks for more than 30 days from receipt.

The all-India average retail sugar price was ₹63.28 per kg on August 31, up 37% year-on-year, while wholesale prices rose 36.28% to ₹58.40 per kg, as per Consumer Affairs Ministry data, reported PTI.

The government has blamed mills for "jacking up" prices, while production estimates for 2025-26 have been revised to 306 lakh tonnes from 343 lakh tonnes earlier.